Pakistan, IMF Talks to Conclude Today

The final round of policy talks between Pakistan and the International Monetary Fund (IMF) are taking place today, after which the lender’s Mission will head back to Washington. Sources told ProPakistani Federal Finance Minister Muhammad Aurangzeb will participate. Key agenda items include the national fiscal compact, heavy taxes on agricultural income by provinces and comprehensive economic reforms. The Federal Board of Revenue (FBR) has briefed IMF representatives on plans to expand the tax net and increase revenue through economic documentation. Measures include electronic monitoring of industrial production via a software system named “Digital Eye” and by installing cameras in factories located in major business hubs. The track-and-trace system in tobacco, cement, sugar, and fertilizer industries will be enhanced, while enforcement through the point-of-sale system will be increased in the next 5-6 months. A crackdown on tax evaders is planned to begin this month. Legal action and arrests will be on the cards for non-compliance, sources added. IMF has been further informed that the federal government aims to raise the tax-to-GDP ratio from the current 10.3 percent to 13.7 percent by 2028.