Rs40bn additional tax measures soon to meet fiscal deficit: IMF

ISLAMABAD / WASHINGTON: Amid rising circular debt and revenue shortfall, the government plans to introduce additional tax measures of around Rs40 billion in a couple of weeks to meet the fiscal deficit limit and carry on with the IMF programme.

 

This was stated by International Monetary Fund’s mission chief to Pakistan Harald Finger at a news briefing on Friday. He was assisted by Daniela Gressani, the IMF deputy director for the Middle East and Central Asia and resident representative to Pakistan Tokhir Mirzoev.

The IMF mission also had a rare session with the Senate Standing Committee on Finance and Revenue against the backdrop of the panel’s resistance to let tax-related cases covered by the anti-money laundering / counter terror financing laws.

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Mr Finger said Pakistan faced Rs40bn revenue shortfall in the first quarter. “We worked out with authorities the strategy to meet fiscal deficit target and the government will take measures of that amount to bridge the gap.”

Responding to questions, he said the government had to finalise the measures in a few weeks. He agreed with a questioner that these additional measures had now become “prior action” before going into the next quarterly review.

He said the question of an increase in power tariff was not discussed but confirmed that the circular debt had gone up to Rs661bn, including payable stocks of Rs326bn and Rs335bn parked consistently with the power holding company.

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