Pak may succumb to IMF's demand to revive USD 6 billion deal
Oct 23, 2021
Islamabad [Pakistan], October 23 : The Imran Khan government is devising upon imposing a federal tax on agricultural income as per the demand of the International Monetary Fund (IMF) to "revive" the USD 6 billion deal signed in July 2019.
The Express Tribune reported citing the sources that a draft of the legal amendment has been made following the discussion between Pakistani representatives and the IMF and the tax authorities have informed the IMF regarding the introduction of the 4th Tax Laws Amendment Ordinance.
The IMF has reportedly put conditions to revive the USD 6 billion deal. The conditions include the imposition of additional taxes and withdrawal of sales tax exemptions by November 1.
Citing the sources, Tribune reported that IMF majorly demanded the country to bring the agricultural sector under the federal tax domain. However, Pakistan has not agreed to the memorandum for economic policies (MEFP) so far.
"The agricultural income can be brought into the federal tax net without a constitutional amendment," Tribune quoted Federal Law and Justice Minister Farogh Naseem as saying.
The newspaper further informed that the issue has been discussed by the Federal Board of Revenue (FBR) chairman and the finance adviser.
In view of the political instability that Pakistan is undergoing and the economic disaster that the country is heading to, it remains doubtful whether Imran Khan clears the proposal.
According to the newspaper, the Imran Khan government could not impose taxes on agricultural income under the 1973 constitution.
However, the government has reportedly found a "solution" to the problem with the law ministry. Under the solution, the government may amend the Income Tax Ordinance, 2001.
Earlier, the adviser to Pakistan Prime Minister Imran Khan on Finance and Revenue Shaukat Tarin left Washington on Thursday after talks with the International Monetary Fund (IMF) did not reach a satisfactory conclusion, media reports said.
The talks could have ended up in getting the endorsement of the government's policies by the IMF. Finance Secretary Yousaf Khan stayed back to continue discussions, Dawn reported.
