ISLAMABAD: The International Monetary Fund (IMF) is not happy with performance of Pakistan’s top taxman – the Federal Board of Revenue (FBR) – which has requested the international lender to further reduce tax collection target set for the FBR.
After conclusion of talks on technical level, Islamabad on Monday began policy level negotiations with an IMF delegation for the third installment of $450 million IMF loan.
The Ministry of Finance started the talks to considered proposals to give more autonomy to the National Electric Power Regulatory Authority (Nepra) and Oil and Gas Regulatory Authority (Ogra) – both regulatory authorities – as well as to discuss policy to achieve goals.
According to sources privy to the meeting, the IMF delegation put emphasis on achieving the tax targets by increasing the non-tax revenue.
“The government team, however, said loss making state-run institutions will be privatised for generating non-tax revenue. The FBR requested the IMF to further reduce the tax collection target,” a source told The Express Tribune.
Pakistan and IMF review mission in Nov 2019 agreed on downward revision of the FBR’s tax collection target to Rs5,270 billion. The earlier envisaged tax collection target was Rs5,503 billion for 2019-20.
In the first phase of policy level talks on Monday, top officials of the FBR, Ministry of Energy, Nepra, Ogra and the Ministry of Privatisation were also present.
The sources said the FBR said that the new taxes and hike in interest rate would increase inflation. However the IMF team was not in favour of the idea of reducing the tax collection target.
They said the IMF team expressed dissatisfaction over the FBR’s performance.
The government told the IMF team that it would privatize loss making entities. In the first phase six institutions will be privatized and later 27 institutions will be privatised.
The Finance Ministry informed the IMF that electricity and gas prices would not be raised. “An Integrated system will be introduced to increasing electricity and gas prices,” the source added.