Islamabad: Cash-strapped Pakistan must take steps to ensure that its high-income earners pay taxes and only the poor receive subsidies if it wants to function as a country.
In an interview with German state broadcaster Deutsche Welle on the sidelines of the Munich Security Conference in Germany on Friday, IMF chief Kristalina Georgieva said Pakistan needed to take tougher steps to avoid going into a “dangerous place” where its debt could go into debt. needs to be reorganized. ,
He said the IMF was very clear that it wanted to protect the poor people of Pakistan, Dawn newspaper reported,
It should not be that the rich benefit from the subsidy. it must be poor [who] benefit from them,” she said.
He said, “What we are demanding are the steps that Pakistan needs to take in order to be able to function as a country, not to go into a dangerous situation where its debt needs to be restructured.” Is required.”
He said Pakistan was devastated by flash floods last year, which affected one-third of its population.
I want to emphasize that we are emphasizing on two things. Number one: tax revenue. who can, who are making good money [in the] The public or private sector needs to contribute to the economy.
“Secondly, fair distribution of pressures by making subsidies reach only those who really need it. It should not be that subsidies benefit the rich,” she said.
The IMF chief’s statement came days after both sides completed the ninth review of the $6.5 billion bailout package without a staff-level agreement after 10 days of talks. However, both sides agreed on a set of measures that could still help in achieving the deal.
Pakistan, which is in dire need of funds as it is reeling under a severe economic crisis, has received financial aid from the IMF in the past and is currently in discussions with the organization to restart its loan program .
An agreement on the ninth review of the program would release more than USD 1.1 billion. The restoration of the IMF program will also open up other funding avenues for Pakistan.
Meanwhile, foreign exchange reserves with the State Bank of Pakistan have dropped to around US$3 billion, barely enough to cover three weeks of controlled imports.
Earlier, the IMF said in a statement that the two sides have agreed to remain connected and virtual discussions will continue in the coming days to finalize the implementation details of policies, including tax measures, discussed in Islamabad.
The government is in a race against time to implement tax measures and reach an agreement with the IMF. The IMF has given Pakistan a March 1 deadline to implement all the measures.