Mobilise untapped tax bases to raise revenue, IMF to Pakistan

The International Monetary Fund (IMF) has asked Pakistan to broaden its tax base by targeting untapped revenue sources. The statement from the IMF came after it concluded a staff visit to Pakistan from November 12 to 15, during which they reviewed the country's economic progress. The IMF, led by Nathan Porter, said the staff visits are standard practice for countries with semi-annual programme reviews and aim to engage with the authorities and other stakeholders on the country's economic developments and policies and the status of planned reforms. According to US media report, the IMF mission  discussed a $7-billion bailout within six weeks of its approval by the IMF board, but came too early for the first review of the Extended Fund Facility (EFF), due in the first quarter of 2025. Some major lapses prompted the IMF to intervene.Among these were a shortfall of nearly 190 billion rupees ($685 million) in revenue collection during the first quarter of the current fiscal year, report said. Report further said that Pakistan failed in the bid to sell its national airline, a major setback on the path to privatising loss-making state-owned enterprises, required by the IMF. Pakistan has struggled for decades with boom-and-bust economic cycles, prompting 23 IMF bailouts for the South Asian nation since 1958, it said. 
As per Geo News report, the visiting delegation and the Pakistani authorities agreed on the need to continue prudent fiscal and monetary policies and revenue mobilisation from untapped tax bases, while transferring greater social and development responsibilities to provinces. In addition, he said, structural energy reforms and constructive efforts are critical to restore the sector’s viability.Porter further stated that Pakistan should take steps to decrease state intervention in the economy and enhance competition, which will help foster the development of a dynamic private sector.