News Desk

Finance Minister Muhammad Aurangzeb on Thursday said that Pakistan would strike a deal with the International Monetary Fund (IMF) this month, expressing optimism about the positive progress in talks between Islamabad and the global lender to reach a staff-level agreement on a new bailout programme.

After satisfying every demand made by the lender in its yearly budget, the government hopes to seal the deal with the IMF on a rescue of over $6 billion.

The finance minister informed the Standing Committee on Finance of the National Assembly that the talks with the IMF were going well.

Announcing to the assembly that no nation could function with a 9% tax-to-GDP ratio, Aurangzeb promised to increase it to 13%.

The minister stated,

“The Fund requires taxation on the actual income, which is fair.”

The goal of the federal government’s tax-heavy Rs18.877 trillion budget for the fiscal year 2024–25 (FY25) was to boost public revenue and appease the IMF, which has frequently called for increased tax collection. The budget was unveiled last month.

By July of next year, the budget seeks to raise Rs13 trillion, an increase of over 40% over the current fiscal year, in order to alleviate the crippling debt load that has resulted in interest payments eating up 57% of government revenue.

The majority of the tax increases are borne by paid workers, who make up a small portion of Pakistan’s largely unorganized sector, together with a few retail and export companies. The budget also hinted at harsh penalties for individuals who evade taxes, such as limitations on access to gas, electricity, and mobile phones, as well as the inability to travel overseas.

During the briefing today, the minister expressed the hope that all sectors would be brought under the tax net. According to the minister, everyone will be made a filer in accordance with Prime Minister Shehbaz Sharif’s orders.