Mohammad Arshad Islamabad
A deadlock in the talks between the government and International Monetary Fund (IMF) continues to prevail over the issue of target of revenue collection for the upcoming fiscal year 2021-2002. Both sides have also failed in evolving any agreement on the gas and power tariffs so far.
Further talks between both the parties are expected to be held within the ongoing week and both sides will have to take a position on this issue before the presentation of the federal budget for the upcoming fiscal year, because the government will have to set tax collection target to ensure allocation of funds for provinces in the budget from the divisible pool of national resources.
Well placed source at Finance Division told Pakistan Observer here on Monday that the government has denied IMF’s condition for levying new taxes worth Rs 200 billion.
Federal Board of Revenue (FBR) has proposed continuation of tax exemptions for some certain sectors while withdrawal of tax exemptions from some sectors that already enjoy tax exemptions have also been proposed.
The government and IMF have also not come to any agreement on the issue of slashing or continuing tax exemptions for some sectors.
The source said that the government was trying to convince IMF that it would increase the tax collection target by following own ways and methods and increasing power and gas tariffs would not be a viable and durable solution to meet higher revenue collection target.
This is why, the source said that Finance Minister Shaukat Tarin had to explain in a recent statement before the media that the government had to contact IMF because the previous government had shown economic growth by taking loans from international and domestic lenders.
Therefore, the government had to levy additional tariffs on utilities because the PML-N government had incurred loss of $ 20 to economy by maintaining rupee stable against dollar in an artificial manner.