IMF chief asks Pakistan to tax the rich, subsidise the poor
Pakistan, the IMF are holding a series of meetings for reaching an agreement over $1.1bn release
KARACHI (Dunya News) - International Monetary Fund’s (IMF) managing director Kristalina Georgieva has urged Pakistan to ensure that its rich pay taxes and only the poor get the subsidies if the country wants to function as a country.
“My heart goes to the people of Pakistan. They have been devastated by the floods that affected one-third of the population of the country,” she told German broadcaster Deutsche Welle on Friday on the sidelines of the Munich Security Conference.
“What we are asking for are steps Pakistan needs to take to be able to function as a country and not to get into a dangerous place where its debt needs to be restructured,” she said.
“I want to stress that we are emphasising two things. Number one, tax revenues. Those who can, those that are making good money [in the] public or private sector need to contribute to the economy. Secondly, to have a fairer distribution of the pressures by moving subsidies only towards the people who really need it,” she said.
Pakistan is confronting an acute economic crisis and seeking IMF help. The Fund's chief Kristalina Georgieva speaks to DW at the Munich Security Conference. pic.twitter.com/0VLZHlyL2W— DW Asia (@dw_hotspotasia) February 17, 2023
“It shouldn’t be that the wealthy benefit from subsidies. It should be the poor [who] benefit from them,” she said, adding that IMF was very clear that it wanted the poor people of Pakistan to be protected.
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The IMF chief’s statement came days after two sides could not reach a deal earlier this month and a visiting Fund delegation departed Islamabad after 10 days of talks but said negotiations would continue. Pakistan is in dire need of funds as it battles a wrenching economic crisis.
Pakistan and the IMF are holding a series of meetings for reaching an agreement on a reforms agenda under the country’s $6.5 billion bailout programme, which it entered in 2019.
An agreement on the ninth review of the programme would release over $1.1bn.