KARACHI- International Monetary Fund (IMF) resident representative in Pakistan has dismissed recent media reports suggesting that the lending body is contemplating advising Pakistan to increase taxes on salaries and business income, along with raising the maximum threshold for petroleum levy.
Esther Perez Ruiz clarified that, contrary to circulating information, there are currently no plans for such economic measures. Pakistan, operating under a caretaker government following the approval of a $3 billion stand-by arrangement (SBA) in July, received the first tranche of $1.2 billion from the IMF.
This financial assistance aimed to address a severe balance of payment crisis, with the country’s foreign exchange reserves reduced to barely three weeks of controlled imports.
The IMF, as part of the bailout deal, mandated Pakistan to raise $1.34 billion in new taxation to achieve necessary fiscal adjustments.
As a result these measures contributed to a historic inflation rate of 38% year-on-year in May, the highest in Asia, which still remains above 30%.
