IMF not happy as Pakistan misses opportunity to broaden tax base in Budget FY24

June 15, 2023 (MLN): Pakistan's budget for the financial year 2023-24 has missed an opportunity to broaden the tax base in a more progressive way, Esther Perez Ruiz, the IMF's resident representative for Pakistan said on Thursday. 

The staff remains engaged to discuss policies to maintain stability and the long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable BISP recipients and development spending, she added.

"The new tax amnesty runs against the program’s conditionality and governance agenda and creates a damaging precedent," she further noted. 

Pertaining to the crucial energy sector, she said that measures to address the energy sector’s liquidity pressures could be included alongside the broader budget strategy. 

Esther further added that the IMF team stands ready to work with the government in refining this Budget ahead of its passage.

It is important to note that the country has only two weeks left until its bailout program expires and the dissatisfaction of the fund over the draft budget is the major drawback for the already weakening economy. 

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