There have been several claims and concerns that as Pakistan and the International Monetary Fund of the IMF go closer to the conclusion of a new support program the IMF has made its demands on the South Asian nation and economy stricter.
According to a report published in ARY News, the IMF mission has asked the Pakistani government to introduce taxation on pension income over Rs 100,000 per month. This is needed as part of the upcoming bailout since the IMF has also put forth some conditions on Pakistan to change the pension system in the country.
”The IMF will talk about this policy with Pakistan from tomorrow as both parties have come close to Pakistan and the agreement,” a senior government official told reporters with whom he is not identified. Lawmakers are expected to consider approving this to address the wealthiest pensioners.
This is as Kenya continues to engage in discussions for the fresh IMF loan it requires to keep afloat after running out of money. The bailout issue is not far from being understood. Pakistan has to accept that it has to take difficult economic measures, like controlling its spending and decreasing its budget deficit.
A related recent development also comes from the IMF’s concern that Pakistan should be able to increase the general sales tax to 18%, as reported by ARY News last week. The global lender and Pakistan’s representatives stated this in four discourse sessions.
Even though the conditions put forward by the IMF are extremely demanding, The State of Pakistan seems to have no intentions of seeking additional alternatives for IMF funding. The proposed negotiations between the two parties will be very important in the coming days as the country embarks on tough times while implementing economic reforms and the demand for fiscal consolidation.
