IMF urges govt to increase taxes, energy tariffs

The International Monetary Fund (IMF) has urged the Pakistan government to increase taxes and energy tariffs, as the government struggled to revive the $6 billion program.

It is pertinent to mention that the global financial organization has not released any installments since December 2, 2019. The IMF has also called on giving autonomy to the regulators

As per details, the IMF has insisted on raising electricity and gas prices, eliminating tax breaks, and giving regulators autonomy, but the government is not in a position to make difficult decisions.

Earlier, the IMF said that under the State Bank of Pakistan’s temporary regulatory measures, banks have deferred a total of Rs653 billion of clients’ payment of principal on loan obligations for one year so far, to maintain banking system soundness, and sustain economic activity. The IMF in its report, “Policy Actions Taken by Countries” updated various steps Pakistan has taken since March to deal with the Covid-19 crisis.

The government has started to implement several measures, through December 2020, to pre-empt a potential second wave, such as toughening the rules for the international passengers travelling from countries with high prevalence of the Covid-19, the update added.

The economic activity worsened notably, and growth is preliminarily estimated at -0.4 percent in the fiscal year, 2020. A gradual recovery is expected in fiscal year 2021 as the economy reopens, it added.