Pakistan: IMF advised to tax the rich, the government increased tax on the poor to raise revenue

Pankaj Prasad
Pakistan PM Shahbaz Sharif
Pakistan PM Shahbaz Sharif

Georgieva suggested that the Pakistani government needs to tax those in the public and private sector who earn more and subsidize the poor.

Pakistan is passing through the most severe economic crisis of its existence. The situation is that Pakistan has reached the verge of bankruptcy and only debt can save its sinking economy. The government of Pakistan was in talks with the IMF in the past to get a loan, but the government of Pakistan refused to accept the terms of the IMF and the deal got stuck. Now a Pakistani media report has revealed what was the reason behind Pakistan's stalled deal with the IMF.

What does the IMF want?

Kristalina Georgieva, Managing Director of the International Monetary Fund, said in a conversation with a German broadcaster on the sidelines of the Munich Security Conference in the past that we had asked the government of Pakistan to take such steps so that its economy could function properly and it would be There is no need to restructure the loan. Georgieva suggested that the Pakistani government needs to tax those in the public and private sector who earn more and subsidize the poor. However, it is not yet clear whether the IMF is advising to tax only the rich or those who have not paid their dues such as real estate, retail, agriculture etc.ย 

What is the compulsion of Pakistan?

It is very difficult for the Government of Pakistan to accept this advice of IMF. The reason for this is politics. In fact, the Shahbaz Sharif government is already in trouble due to rising inflation and opposition from Imran Khan. In such a situation, he does not want to anger his electorate, especially those belonging to the retail and real estate class, by increasing the tax burden on them. Shahbaz Sharif's government has given huge subsidies in energy and taxes to big industrialists. In such a situation, the government does not want to anger its supporters by reducing subsidies and imposing taxes. This is the reason why the deal between Pakistan and the IMF could not be done. Don't want to offend them. Shahbaz Sharif's government has given huge subsidies in energy and taxes to big industrialists. In such a situation, the government does not want to anger its supporters by reducing subsidies and imposing taxes. This is the reason why the deal between Pakistan and the IMF could not be done.ย 

The poor people of Pakistan are grinding

Can't even impose indirect tax for compliance because it will affect the common people of Pakistan, who are already suffering from rising inflation. It has been said in the report that the tax system of Pakistan is such that the rich get richer and the important thing is that this rich class controls the politics. In such a situation, it does not seem that the bad days of Pakistan are about to end. The way political instability is increasing there, it is causing apprehension that either Pakistan may go bankrupt or there may be a return to military rule once again!