The Federal Board of income’s (FBR) performance has drawn criticism from the International Monetary Fund (IMF), which has also denied assertions that the income shortfall has been fixed.
According to sources, talks for a $1 billion tranche are still going on between the Ministry of Finance and the IMF mission.On Thursday that the IMF mission met with a team headed by Federal Finance Minister Mohammad Aurangzeb to discuss new tax targets.
The administration gave a report on cost-cutting measures and public institution integration during the meeting, including the termination of positions and institution mergers that saved Rs17 billion.
Notwithstanding these initiatives, the IMF questioned FBR’s ability to manage the revenue gap and disregarded Pakistani officials’ assertions that the problem had been resolved.
The group also discussed the potential of a “golden handshake,” which might result in the termination of thousands of lower-grade jobs and 700 positions in grades 17 to 22, as well as the right-sizing of government personnel.
According to sources, changes to the Civil Servants Act are also being contemplated in order to make it easier to fire surplus government workers. A plan to cut spending and deal with the revenue deficit was also offered by the Ministry of Finance.
Pakistan’s proposal for tax breaks for foreign investment projects was previously denied by the IMF. In a thorough briefing to the IMF group, the Special Investment Facilitation Council (SIFC) had requested the exclusions, claiming that tax breaks would aid in luring in foreign capital.
The international lender, however, turned down the proposal, upholding its position on budgetary restraint.
SIFC representatives gave presentations on infrastructure plans, governance frameworks, and investment prospects during the briefing.
