Pakistan: IMF pushes regressive taxes (Bretton Woods Project)

Pakistan: IMF pushes regressive taxes

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).

IFI-induced debt catastrophes? News|Bretton Woods Project|30 September 2010|update 72|url
Natural disasters in Haiti and Pakistan have heightened calls for larger debt cancellation, rather than new IMF loans, and for a rethink of the sovereign debt system. read article...
IMF policy, but not practice? Regressive tax in Pakistan News|Azhar Lashari and Rachel Sharpe|13 June 2011|update 76|url
The IMF is withholding part of a loan to Pakistan over its failure to raise consumption taxes or decrease spending, but IMF-led reforms fail to address the under-taxation of the country's wealthy elite. The IMF's official approach to tax policy advice, articulated in a March board paper, shows a new appreciation for the distributional effects of taxation, but policy has not translated into practice. read article...
Pakistan loan talks despite debt cancellation calls News|Bretton Woods Project|6 December 2012|update 83|url
Talks between the IMF and Pakistan under post-programme monitoring resumed in September. Despite confidence amongst Pakistan officials in their country's capacity to repay its loans, the IMF fears the need for a second loan early next year read article...