Saul Loeb—AFP
Global fund says the economic program it is supporting calls for utilizing taxes to fund social and development funding
The International Monetary Fund, during a press briefing on Thursday, said Pakistan must increase tax revenue to fund social and development funding.
Responding to a question on whether Islamabad should be advised to cut subsidies and development spending to curtail its primary deficit, spokesman Gerry Rice said the economic plan supported by the IMF also hoped to reduce debt. “One of the key elements of the program that the IMF is supporting in Pakistan… is the need to mobilize domestic tax revenue to fund much needed social and development spending while placing debt on a firm downward trend,” he said. “This was actually something that our acting Managing Director, David Lipton, emphasized in his recent meeting… with Prime Minister Imran Khan,” he said, adding that an IMF would visit Pakistan within the “next few days.”
The Pakistan Tehreek-e-Insaf-led government, in a bid to reduce the current account deficit, has added Rs. 10.3 trillion to Pakistan’s debt and liabilities in its first year in power. The total debt at the end of the last fiscal year stood at Rs. 40.2 trillion.
Earlier this year, the IMF approved to Pakistan a three-year bailout program of $6 billion. At the time, the spokesman had said this program would support Pakistan’s efforts to achieve “sustainable growth” and “improve the standards of living.” Islamabad has already received the first tranche of this loan, worth $991.4 million, from the IMF.