IMF asks Pakistan to raise taxes from untapped sources

Pakistan and the International Monetary Fund (IMF) have agreed to maintain prudent monetary policies and focus on revenue mobilization from untapped tax bases.

The International Monetary Fund (IMF) mission led by Nathan Porter concluded a staff visit to Pakistan from November 12 to 15, 2024.

During the visit, the IMF team met with senior officials from federal and provincial governments, the State Bank, and representatives from the private sector.

Staff visits are standard practice for countries with semi-annual program 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.

At the end of the visit, Porter said, “We had constructive discussions with the authorities on their economic policy and reform efforts to reduce vulnerabilities and lay the basis for stronger and sustainable growth.

"We agreed with the need to continue prudent fiscal and monetary policies, revenue mobilization from untapped tax bases, while transferring greater social and development responsibilities to provinces."

In addition, structural energy reforms and constructive efforts are critical to restore the sector’s viability, and 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.

Strong program implementation can create a more prosperous and more inclusive Pakistan, improving living standards for all Pakistanis.

IMF is encouraged by the authorities’ reaffirmed commitment to the economic reforms supported by the 2024 Extended Fund Facility (EFF).