In talks with Pakistan, IMF calls to use untapped tax sources to mobilise revenue

ISLAMABAD: The International Monetary Fund (IMF) urged the government of Pakistan to broaden revenue mobilisation by targeting untapped tax bases, Nathan Porter, head of the IMF mission which visited Islamabad from November 12 to 15, 2024, said.

The weeklong talks between the International Monetary Fund (IMF) and Pakistani team led by Finance Minister Muhammad Aurangzeb concluded on Friday, where both reviewed the country’s economic progress and the status of planned reforms.

In a statement released by the Washington-based lender, it stated that the IMF team met with senior officials from federal and provincial governments and the State Bank, as well as representatives from the private sector.

The Fund said that the mission had “constructive discussions with the authorities” on their economic policy and reform efforts to reduce vulnerabilities and lay the basis for stronger and sustainable growth.

IMF and Islamabad authorities agreed “with the need to continue prudent fiscal and monetary policies, and revenue mobilization from untapped tax bases” while transferring greater social and development responsibilities to provinces, IMF mission chief Porter said, as quoted by the statement.

Additionally, Porter stressed structural energy reforms as “constructive efforts are critical to restore the sector’s viability.”

IMF mission further suggested Pakistan should take steps to decrease state intervention in the economy and enhance competition, which will help foster the development of a dynamic private sector.

“Strong program implementation can create a more prosperous and more inclusive Pakistan, improving living standards for all Pakistanis,” the mission chief was quoted as saying.

The global lender’s mission, Porter said, was encouraged by the authorities’ reaffirmed commitment to the economic reforms supported by the 2024 Extended Fund Facility (EFF).

The next mission associated with the first EFF review is expected in the first quarter of 2025.