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Pakistan-IMF Clash Over Fiscal Figures; Government Cautious on Taxation and Supplementary Budget
Divergence between Pakistan and IMF on fiscal data; government cautious on additional taxes and supplementary budget.
ND
by News Desk
2024-03-16
Pakistan-IMF Clash Over Fiscal Figures; Government Cautious on Taxation and Supplementary Budget

Tensions have arisen between Pakistani negotiators and the International Monetary Fund (IMF) regarding fiscal data, highlighting discord over key economic strategies. While the IMF advocates for strict adherence to fiscal targets, the government exhibits reluctance towards imposing additional taxes through a supplementary budget for the remainder of the fiscal year.

Reports suggest that revisions to the budget deficit target are likely, but the IMF insists on maintaining a primary surplus, urging Pakistan to rein in expenditure and enhance revenue collection efforts.

During discussions, concerns were raised regarding the Federal Board of Revenue's (FBR) capacity to effectively collect taxes, particularly in Punjab. The proposal to empower the FBR to collect taxes in Punjab, with subsequent distribution of revenues to the province after deducting collection fees, was presented as a means to improve fiscal federalism.

Furthermore, the IMF has recommended revising the National Finance Commission (NFC) award on an interim basis through consensus between the federal and provincial governments, aiming to enhance fiscal decentralization and equitable resource allocation.

The government's cautious approach towards imposing additional taxes and implementing a supplementary budget reflects concerns about potential economic ramifications and public sentiment. However, diverging viewpoints between Pakistan and the IMF underscore the complexity of balancing fiscal sustainability with socio-economic priorities.

As negotiations continue, stakeholders must navigate through disagreements and seek mutually beneficial solutions to address Pakistan's fiscal challenges and promote economic stability.
Tagged:

Pakistan

IMF

FiscalPolicy

Taxation

EconomicNegotiations

BudgetaryConcerns
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