IMF Says Pakistan Still Is Not Collecting Enough Taxes

The Resident Chief of the International Monetary Fund (IMF) in Pakistan Mahir Binici has warned that Pakistan’s economic challenges exist due to the country’s inability to generate sufficient tax revenue. He said this puts a disproportionate tax burden on the formal sector as certain sectors contribute little to the national exchequer and put pressure on the few that do. The lender’s representative said all this at a conference organized by the Pakistan Retail Business Council (PRBC). At the same conference, Finance Minister Muhammad Aurangzeb said the retail sector accounts for 19 percent of GDP but contributes only 1 percent in taxes. He explained agriculture, retail, wholesale, and real estate must now bear a fair share of the tax burden, as the current system is unsustainable. The government plans aggressive enforcement against informal and undocumented businesses to improve tax collection. Aurangzeb also revealed that a mission from the International Monetary Fund (IMF) will visit Pakistan on February 24 to negotiate the release of $1-1.5 billion in climate financing.