Dr. Aisha Ghaus Pasha, Minister of State for Finance and Revenue, stated that the government would handle all concerns with the International Monetary Fund (IMF) as quickly as possible, including personal income tax revisions agreed upon by the previous administration.
Dr. Pasha said the discussions with the IMF to obtain a staff-level agreement will be completed very soon at the conclusion of the Senate Standing Committee on Finance on Thursday. On a daily basis, the administration negotiates with the IMF. She went on to say that budget numbers are discussed on a daily basis.
IMF is looking into each and every one of the budgeted goals
She stated that the IMF is looking into each and every one of the budgeted goals. “We’re attempting to provide them with clarity on all of the points they’ve raised.” “We are extremely optimistic that all of the difficulties will be resolved quickly,” she stated.
The IMF’s main concern is the failure to meet the terms of the personal income tax revisions. She note that the government able to adequately deal with the withholding tax regime once the tax base is extende and the number of filers increases.
The underlying issue, according to the minister, is that the previous government failed to implement the necessary measures in accordance with the IMF’s requirements and timetables.
IMF is pursuing the implementation of the requirements
She stated that the IMF will not require any new extra taxing measures in 2022-23 until the previous government meets the conditions and benchmarks set forth in the IMF agreement.
“I want to state unequivocally that the propose adjustments in personal income tax rates and the increase in the petroleum levy already agreed upon with the IMF by the previous government.” When it comes to the increase in electricity costs, it also agreed upon by the previous administration. As a result, the IMF is pursuing the implementation of the requirements already agreed upon with the previous regime, rather than new measures,” she explained.
The true issue, according to the minister, is non-compliance with conditions and missed deadlines. Which have resulted in a backlog for the current administration. We are also persuading the IMF that we are clearing the backlog. But the administration is finding it difficult to move quickly with the implementation of initiatives.
She went on to say that while the government will not be able to fully implement all of the conditions. That the PTI government purposefully delayed. They will adopt measures up to the amount of adjustment that the economy can tolerate.
$2.3 billion loans to Pakistan
She stated that the processing of a $2.3 billion loan to Pakistan is virtually complete. When asked if China had agreed to roll it over. Furthermore, she said that the influence of increase gasoline prices on inflation is not limited to Pakistan. But is a global phenomenon.
The minister indicated that the adjustment in the holding time and tax rate. On capital gains of immovable properties suggested to restrict speculative buying and selling of open plots. During a meeting of the Senate Standing Committee on Finance, which was studying the Finance Bill 2022.
Non-productive investment to productive investment
She claims that the government is attempting to discourage unequal gains by levying a portion of unearned gains. The goal is to use capital gains from immovable properties to redirect non-productive investment to productive investment. The government encourages investors to put their money into more productive ventures. In this aim, the government has included in the budget a number of tax breaks, notably for agricultural projects.
The government had the option of relying on indirect taxes, but it chose to focus on progressive direct taxes. She went on to say that the administration has not imposed any indirect taxes. In the budget for the next two years (2022-23).