Pakistan agrees to increase taxes

Pakistan agreed to impose new taxes and cut spending in its budget, after 3 days of negotiations by the International Monetary Fund (IMF) on a new tranche of a financial bailout programme.

Pakistan’s Finance Minister Isaac Dar announced his country’s approval of taxes that would bring in revenues worth Rs 215 billion.

Such a decision would secure Pakistan’s acquisition of a new tranche of at least $1.1 billion under a $6.7 billion bailout with the Monetary Fund.

Earlier this month, Pakistan’s Prime Minister Shahbaz Sharif’s government submitted an annual spending plan aimed at balancing the promotion of economic growth with the stringent conditions imposed by the International Monetary Fund, and decided to cut spending by Rs 85 billion.

The International Monetary Fund (IMF) raised objections to some of the proposals, saying that the budget’s fiscal policies had not expanded the revenue base and that an amnesty was incompatible with the “conditionality and governance agenda” of the bailout programme.