The International Monetary Fund (IMF) mission has asked Pakistan to start taxing pensions that are Rs 1,00,000 per month, as per an ANI report citing ARY News. The IMF also demanded Pakistan to make changes to its pension system as part of a new financial aid program.
The global lender will discuss the policy with Pakistan, starting tomorrow as the nation and IMF are close to finalizing their agreement. A main part of the new loan program is to tax monthly pensions over Rs 100,000, as required by the IMF. This measure is expected to be supported by lawmakers to target wealthy pensioners, according to ARY News.
As talks between the IMF and Pakistan go on, it’s clear that the new bailout will require tough economic actions. Despite this, Pakistan is determined to stick with the IMF loan program and has no plans to look for an alternative.
To qualify for the new bailout program, Pakistan needs to manage its spending and reduce its budget deficits, according to sources. Last week, the IMF asked Pakistani officials to raise the general sales tax (GST) to 18%, as reported by ARY News.
This demand came during four rounds of discussions between the IMF and Pakistani officials for a new loan.