IMF calls for increase in personal taxes, will the salaried class have to pay extra taxes? today latest news

 

 IMF calls for increase in personal taxes, will the salaried class have to pay extra taxes? today latest news

The Executive Board of the International Monetary Fund (IMF) has revived the ارب 6 billion program for Pakistan and approved the release of a ارب 1 billion tranche under it.

The release of the ارب 1 billion tranche has been approved by the IMF Board after taking precautionary measures by Pakistan. This includes the passage of the Money Budget by the Parliament as well as the approval of the State Bank of Pakistan Amendment Bill.

The installment was expected to be released in early January, but due to delays in the passage of the Money Budget and the Central Bank Amendment Bill in Parliament, the release was due in early February. While the IMF has commended Pakistan's initiatives, it has also called on Pakistan to make reforms in some areas for the continuation of this program in the future so that the seventh review of this program in the month of April. The release of the next installment could be approved in the second meeting. A statement issued by the IMF Board after the approval of this installment said that extensive reforms are expected in the tax system, public financial and debt management to improve Pakistan's financial system. The IMF has called for reforms in personal income tax.

It should be noted that after the approval of the one billion dollar installment under the IMF program, the amount to be received by Pakistan will be three billion dollars, while the remaining three billion dollars are subject to the IMF's review of whether Pakistan Has not fulfilled the conditions of IMF? The government has said that the issue is not the salaried class but the income tax exemption in many sectors which has been talked about to be abolished and the IMF wants to abolish this income tax exemption.

 IMF calls for increase in personal taxes, will the salaried class have to pay extra taxes? today latest news

However, according to tax experts in Pakistan and those reporting on the sector, the IMF's personal income tax reform means an increase in the tax on the salaried class, which the IMF has already demanded and In the next review, he will try to make it possible.

What did the IMF say?

A statement issued by the IMF said that timely implementation of policies and reforms is essential for sustainable economic growth. Increased revenue with careful expenditure management will be helpful for infrastructure and social welfare projects.

The International Monetary Fund (IMF) has forecast that the country's economic growth could reach 4% this year, but also fears that inflation will rise this year. The IMF has also expressed concern that the Corona virus could affect Pakistan due to global conditions, rising tensions in the region and delays in implementing system reforms.

Muzammil Aslam, a spokesman for the finance minister, told me that the IMF had called for an increase in personal income tax, including a tax on salaried employees. The higher tax rate is up to 35%.Muzammil Aslam said that for example there is no tax on income from NGOs, provident fund, power plants, agriculture and tuition of doctors and teachers, there is talk of taxing them.

What is personal tax?

The IMF has called for reforms in personal income tax. Talking about personal income tax, tax expert Dr Ikram-ul-Haq told BBC Urdu that it means raising the income tax rate on the salaried class. A former bureaucrat working in government positions in Pakistan said on condition of anonymity that personal income tax includes tax exemption in various sectors along with tax on salaried class. He said that the majority of the personal tax payers in Pakistan include the salaried class and also some self-employed persons.

Dr. Ikram-ul-Haq said that the reform in personal tax means that the IMF wants to increase the tax on the salaried class. It should be noted that the IMF's demand for higher tax collection from the salaried class is not new but it has been demanded before but the government did not agree to this demand.

The IMF had asked the salaried class to raise an additional Rs 130-150 billion, but the government later agreed to abolish the sales tax exemption and did not accept the demand.

Will the government increase income tax on the salaried class?

Speaking on personal income tax reform in an IMF statement, Dr. Ashfaq Hassan, an economist, said that wherever the IMF talks of reform, it means raising taxes or raising gas and electricity tariffs. To increase

 IMF calls for increase in personal taxes, will the salaried class have to pay extra taxes? today latest news

He said that while the government could surrender the sovereignty of the parliament in the country for the passage of the SBP amendment bill, then raising the tax rate on the salaried class is not a big issue for it. Dr. Ikram-ul-Haq said in this regard that the tax rate on personal income in Pakistan starts from 5% to 35%.

For the salaried class, the tax deduction is up to Rs 600,000 per annum. He said that former finance minister Muftah Ismail had reduced the tax exemption on the salaried class up to Rs 1.2 million but the present government, after coming to power, increased the tax exemption to Rs 600,000 in the supplementary budget.

Dr. Ikram thinks that there will be pressure on Pakistan to collect more taxes from the salaried class and this will be emphasized by the IMF.

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Syed Mehtab Haider, a journalist with The News, who regularly covers the IMF program, said when contacted that what was stated in the IMF statement was to abolish income tax exemptions and personal tax. To change the rate and its different levels.