IMF’s advice

Georgieva said the rich should be taxed adequately, and the poor be cushioned from the side-effects of IMF conditions

The IMF lead person has done some plain-talking. Managing Director Kristalina Georgieva took no qualms in saying that the rich in Pakistan should be taxed adequately, and the poor be cushioned from the side-effects of conditionalities from the lender. There can’t be two opinions over it. It goes without saying that there is an elite capture in the country, and subsequently all polices are driven in a way that the common man is made to pay for the luxuries of a section of society that feels itself absolved of liabilities and responsibilities. Likewise, whatever taxation comes the way of aristocrats and the well-to-do is audaciously passed on to the consumers on the receiving end. Surely, this paradigm of budgeting is untenable.

The courteous words from the lender of last resort are worth-pondering. While Pakistan has been with the IMF in many of its programmes, in an earnest and desperate attempt to fix its balance of payments dilemma, it has been noticed that no bailout strategy has worked towards a better relief. Neither can the ado be fixed to this day, nor has it helped jump-start the economy with the billions that have come its way. The makeshift mechanism has been to stay afloat, and with the change of guard at helm of affairs, every new dispensation starts crying foul. But this whole saga has one common denominator: the poor are made to shoulder the burden of mindless taxation.

While Islamabad irons out a renewed deal with the Fund to seek a tranche of $1.2 billion, and has already vetted a mini-budget of new taxes to the tune of Rs170 billion, Georgieva’s advice must fall on its ears. Allocating subsidies for those who really need it is indispensable. Likewise, off and on raising the tariff in the energy and petroleum sectors has proven to be counter-productive. Let’s tax a wider section of the rich who are aloof, and bring the informal economy into the tax net. From land wielders to progressive industrialists and real estate, none are appropriately taxed. Some holy cows should go the abattoir’s way!

Published in The Express Tribune, February 21^st, 2023.

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