The IMF had asked Pakistan to resolve the fiscal deficit before providing further financial assistance as it could not follow the policies approved in the final review of agencies under the IMF.
Islamabad, First Published Jun 11, 2022, 4:29 AM IST
Islamabad: Pakistan tightens sanctions to control fiscal deficit and facilitate International Monetary Fund (IMF) assistance Mifta Ismail, Pakistan’s finance minister, has said he will raise taxes on the rich and bar government officials from buying new cars.
Pakistan, with a population of 22 crore, is facing a severe financial crisis. Foreign exchange reserves are less than $ 10 billion. This is only enough for 45 days of imports. At the same time, the country’s fiscal deficit is rising. The announcement was made by the Finance Minister of Pakistan himself while presenting the budget for the financial year 2022/23 starting in July.
The budget says the rich will raise taxes, ban car imports and ban government officials from buying new vehicles. But it is not clear whether the ban on government officials is related to official vehicles or for personal use.
“We have made some difficult decisions,” he said. But this is just the beginning of difficult decisions, “said Mifta Ismail, Pakistan’s finance minister.
The IMF had asked Pakistan to resolve the fiscal deficit before providing further financial assistance as it could not follow the policies approved in the final review of agencies under the IMF. Ismail said the government will prevent tax evasion, which will help increase revenue to 7 trillion Pakistani rupees ($ 34.65 billion) and reduce the deficit by 2022-23.
The government is targeting a fiscal deficit of 4.9% of GDP in 2022-23, up from 8.6% in the current year. He said the government aims to raise 96 billion Pakistani rupees from privatization. The Pakistani government has taken steps to eliminate fuel subsidies, one of the key steps in complying with IMF regulations, and to increase fuel prices by 40%.
Last Updated Jun 11, 2022, 4:29 AM IST
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