Pakistan: IMF pushes regressive taxes

29 November 2010

In November, Pakistan and the IMF again failed to agree conditions for release of the sixth instalment of the country’s Stand-by Agreement. The Fund is insisting on the country implementing a reformed general sales tax and ending electricity subsidies before further disbursement. Matti Kohonen of NGO Tax Justice Network said that “the sales taxes postulated by the IMF are regressive and borne disproportionately by Pakistan’s poor. Instead it should focus on stopping illicit capital flight, particularly corporate tax evasion to find more revenue to fund basic services and disaster relief efforts.” The Pakistani senate called for debt relief in November (see Update 72).