IMF advises Pakistan to tax the rich & help the poor

MUNICH, Germany: The International Monetary Fund (IMF) Managing Director Kristalina Georgieva has stressed the need for the Pakistani government to collect higher taxes by withdrawing subsidies to the rich.

Talking to the German State Broadcaster Deutsche Welle on the fringes of the Munich Security Conference 2023, Kristalina Georgieva highlighted the two points that the IMF emphasised vis-a-vis Pakistan, saying “Number 1 – tax revenues. Those who can, those that are making good money, public sector, private sector, they need to contribute to the economy.”

“And secondly, to have a fairer distribution of the pressure by moving subsidies only towards the people who really need it. It should not be like the wealthy benefit from subsidies. It should be the poor who benefit from them,” she added.

Kristalina Georgieva told the broadcaster that the IMF had asked Pakistan to take steps to function as a Country and not to get into a “dangerous place” where the country’s debt needed to be restructured.

The IMF Managing Director acknowledged that Pakistan had been ravaged by the unprecedented floods last year, and said that her ‘heart goes out to the people of Pakistan’.

Emphasizing that Pakistan collect taxes from the rich and give benefits to the poor, Georgieva highlighted that the Country did not need debt restructuring.

“There is no debt restructuring for Pakistan. Rather, strict measures are needed to run the Country,” she said.

“We are demanding such measures from Pakistan which were urgently needed” so that “they can run as a country and not reach such a dangerous point where they need to rebuild”.

Earlier in February 2023, the relevant Pakistani officials and the IMF staff concluded the ninth review of the US$ 6.5 billion bailout package without a staff-level agreement.

However, both sides agreed to a set of measures that could still help clinch the deal.