1. IMF clears payment of $501 million to Pakistan

IMF clears payment of $501 million to Pakistan

A IMF study reminded Pakistan that it could double its tax revenues by making concerted efforts to broaden tax bases

By: | Washington | Updated: June 28, 2016 5:17 PM
The IMF had earlier advised Pakistan to continue the reforms introduced during its engagement with the Fund. (Reuters) The IMF had earlier advised Pakistan to continue the reforms introduced during its engagement with the Fund. (Reuters)

The IMF has cleared immediate disbursement of $501 million to Pakistan, taking the total amount given to the cash-strapped country to $6.1 billion in since 2013.

In a statement, issued after the conclusion of 11th review of Pakistan’s economic performance under a three-year programme supported by an Extended Fund Facility (EFF) arrangement, the International Monetary Fund said the decision enables the immediate disbursement of about $501 million to Pakistan.

This brings the total disbursements to $6.01 billion, the IMF said.

On September 4, 2013, the IMF Executive Board had approved the 36-month extended arrangement under the EFF about $6.64 billion or 216 per cent of Pakistan’s current quota at the IMF.

The IMF had earlier advised Pakistan to continue the reforms introduced during its engagement with the Fund as those reforms had been good for the economy.

The IMF particularly underlined the need for retaining the structural measures introduced during the programme, saying those measures would sustainably raise the growth rate, particularly their exports, the Dawn reported.

The Fund had also reminded Pakistan that the current exports of $25 billion were not enough for an economy of over $280 billion and the country should aim to double that.

A recent IMF study also reminded Pakistan that it could double its tax revenues by making concerted efforts to broaden tax bases, strengthening tax compliance and rationalising the tax system in an efficient and equitable manner, the report said.

The study, ‘Unlocking Pakistan’s Tax Revenue Potential’, noted that Pakistan’s tax system did not promote efficiency and fairness and was complex and fragmented.

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