IMF told govt cannot increase taxes: Tarin

Finance Minister Shaukat Tarin said that the International Monetary Fund (IMF) had been informed that Pakistan didn't currently have the capacity to raise its tariffs or taxes under the IMF programme, adding that the World Bank and IMF had been sympathetic to the point of view.

Addressing his first press conference in Islamabad after assuming the charge as finance minister, Tarin said: "Pakistan has not yet come out of the IMF programme, we have discussed with them and told them that our revenues were increasing at 92 per cent but the third wave of

Covid came and decreased after that. "

"At this time, we don't have the capacity to increase tariffs or [adopt] incremental taxes, our common man is completely fed up of this inflation," he said, adding that this had a cascading effect and inflation would increase once fuel charges were increased.

He added that this stance was conveyed and both the World Bank and the IMF had been very sympathetic to it. "We have to tell them that we won't come out of the IMF programme but give us some space and we will change the method.

Tariff increase is not the only way to raise money." He said they were

they concerned that Pakistan's circular debt was increasing and there "should be some brakes" and stability in it. Tareen added that the government would prove that through various measures, but it didn't mean that it would increase tariffs on the common person since Prime Minister Imran Khan was against it.

"We will apologise to them on this and they are sympathetic to us." Addressing taxation, he said its ambit would be further increased through "innovative methods" and the tax-to-GDP ratio would increase every year by one to two per cent.

Tarin added that sudden increases on the orders of the IMF, as had been done in 2019, would "not happen. This is the wrong way of doing it".

Instead, he said, gradual annual increases would be the better way to go and efforts would be made to convince the IMF about it.

"If people think we are trying to come out of the IMF programme, then no we will not. You get a stamp [of approval] from it because of which the world sees you are going towards stability, however, the targets they've given us at this time, we'll tell them that the third wave of Covid-19 has arrived and give us some space at this time."

The finance minister said that when the incumbent government came into power, it faced a lot of challenges, chief being the current account deficit.