There seems little to be upbeat about the conclusion of the much-anticipated but protracted negotiations between Pakistan’s government and a visiting delegation of the International Monetary Fund (IMF) as the country’s economic wizard has hinted at new taxes to secure a tranche of loan needed to resuscitate the country’s sagging economy and save default on its external payments and international financial obligations.
In not-so-veiled terms, the new measures to be reflected in a mini-budget, which is on the anvil and is likely to be presented ahead of the IMF deadline, will generate an additional amount of Rs 237 billion in four months in the head of electricity consumption alone from the people. Notwithstanding other taxes included in the utility bills, it is clear that the government has started implementing the IFM preconditions.
Though in a brief statement, finance minister Ishaq Dar has spelled out the government’s intentions to generate additional revenue and steer the country out of troubled waters, but at the same time he overlooked the ground reality that the measures will weigh heavily on the financial health of the people who are overburdened and will unleash a new wave of price hike.
The deal between Pakistan and IMF concluded at a time when inflation in the country is high and rising by the day with the people increasingly finding it difficult to make both ends meet.
It seems that instead of adding new sectors and potential taxpayers, the government has found an easy solution to burden the existing taxpayers with a tsunami of taxes and duties under the guise of a mini-budget.
According to former finance minister Miftah Ismail, who spoke at an event organized by the Brookings Institute, a combination of countries and institutions could step in to keep Pakistan solvent. “If Pakistan is able to get IMF tranches in, and some loans from the World Bank and the Asian Development Bank … and some deposits from Saudi Arabia and UAE (United Arab Emirates) and perhaps some money from China as well, then I think we should be able to at least avert the default.”
As there is more talk about availing more loans from the IMF to manage the economy, the question arises why financial discipline is not introduced at the higher level of the government and why only the masses who already overburdened should be driven to the wall.
