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ISLAMABAD:
The terms of the bailout package agreed with the International Monetary Fund (IMF) may be “homegrown”, but the Fund has made it a strict prerequisite that Islamabad send out notices to identified tax evaders before it can wish to obtain the $5.3 billion promised under the new programme.
In the first phase, the Federal Board of Revenue (FBR) will send out notices to 10,000 top tax dodgers within this month: this clause has been written down in black and white in the deal reached with the IMF, officials revealed to The Express Tribune. In the second phase, notices will be sent to 15,000 more tax dodgers in August. According to the condition, a total of 100,000 tax evaders will receive notices this fiscal year.
The step is aimed at broadening the extremely narrow tax base of the country, which consists largely of salaried individuals. In a population of 180 million, income tax payers number less than 800,000, according to the FBR.
In return for bailing the Pakistani economy out, the IMF wants Pakistan to increase its tax-to-GDP ratio from its historical low of 8.9%, to 9.5% in the current fiscal year.
If Pakistan fails to do so, under any compulsion, it will cost the country the $5.3 billion bailout package, sources said.
According to the deal, Pakistan is bound to implement five conditions: notifying and netting evaders as part of income tax measures is one of the things it has to do if it wishes for the IMF’s Executive Board to clear the loan. The Executive Board is scheduled to meet in the first week of September.
Other conditions include increasing electricity tariffs, making borrowing expensive by increasing interest rates, putting restraints on provincial expenditures and seeking approval for them from the Council of Common Interests.
When the deal was announced, Finance Minister Ishaq Dar had said the package was “homegrown” and in line with the PML-N’s manifesto.
The terms of the bailout package agreed with the International Monetary Fund (IMF) may be “homegrown”, but the Fund has made it a strict prerequisite that Islamabad send out notices to identified tax evaders before it can wish to obtain the $5.3 billion promised under the new programme.
In the first phase, the Federal Board of Revenue (FBR) will send out notices to 10,000 top tax dodgers within this month: this clause has been written down in black and white in the deal reached with the IMF, officials revealed to The Express Tribune. In the second phase, notices will be sent to 15,000 more tax dodgers in August. According to the condition, a total of 100,000 tax evaders will receive notices this fiscal year.
The step is aimed at broadening the extremely narrow tax base of the country, which consists largely of salaried individuals. In a population of 180 million, income tax payers number less than 800,000, according to the FBR.
In return for bailing the Pakistani economy out, the IMF wants Pakistan to increase its tax-to-GDP ratio from its historical low of 8.9%, to 9.5% in the current fiscal year.
If Pakistan fails to do so, under any compulsion, it will cost the country the $5.3 billion bailout package, sources said.
According to the deal, Pakistan is bound to implement five conditions: notifying and netting evaders as part of income tax measures is one of the things it has to do if it wishes for the IMF’s Executive Board to clear the loan. The Executive Board is scheduled to meet in the first week of September.
Other conditions include increasing electricity tariffs, making borrowing expensive by increasing interest rates, putting restraints on provincial expenditures and seeking approval for them from the Council of Common Interests.
When the deal was announced, Finance Minister Ishaq Dar had said the package was “homegrown” and in line with the PML-N’s manifesto.