LAHORE – The International Monetary Fund (IMF) has expressed reservations over government’s taxation system and a new amnesty scheme in the federal budget for fiscal year 2023-24.
Finance minister Ishaq Dar had presented the budget for fiscal year 2023-24 last Friday. Pakistan has been negotiating with the global lending agency to complete ninth review for resumption of the IMF program.
IMF representative Esther Perez Ruiz stated that the proposed budget has missed an opportunity to broaden the tax base in a more progressive way.
“The long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable BISP recipients and carrying out development projects”, she stated while talking to a selective group of journalists.
She said that measures to address the energy sector’s liquidity pressures could have been included along with a broader budget strategy.
The IMF representative also criticized the proposed tax amnesty scheme that allows people to bring up to $100,000 from abroad without declaring their sources of earning, saying it was against IMF’s conditionality and governance agenda.
Despite reservations, Esther Perez Ruiz said that the IMF was ready to work with the government for refining the budget before its passage from the National Assembly.
