IMF does not regulate Pakistan’s economy: Dar

WASHINGTON: Finance Minister Ishaq Dar has said that his government has not imposed any new taxes and blamed the caretaker government for promising to the IMF to impose more taxes. Resultantly, the tax to GDP ratio stands at 0.75 percent and the taxes are Rs200 billion in total, he said.Talking to the Pakistani media here on Wednesday, he maintained that the money that Pakistan borrowed from the international financial institutions was to pay off the previous loans. He also added that the last governments left no money in the treasury, or his government would not be facing this problem. He rejected the perception that prevails in Pakistan that the government takes directions from the IMF. “The IMF does not regulate Pakistan’s economy,” he said.The finance minister emphasised that the government plans to follow a more aggressive macro economic programme, which includes expanding the tax base. He revealed that his ministry had pinned some 30,000 individuals who defy taxes and notices have been issued to them already.Ishaq Dar appeared optimistic saying that the economic growth will not slow down since the government plans to reduce expenses, curb subsidies and raise development spending. “We have increased the development spending from Rs340 billion to Rs540 billion. Similarly, the government’s target is to reduce fiscal deficit to 4 percent which is at 8.2 percent, improve investment by 20 percent and bring down public debt to 58 percent which currently stands at 63.5 percent,” he said, adding that this was unlawful according to the Fiscal Responsibility Act. The public debt in recent years rose from Rs3 trillion to Rs4.5 trillion. “Pakistan’s economic indicators were upset in the last three years,” he said.The finance minister was hopeful of doubling the social safety net from Rs40 billion to Rs80 billion. He said the government’s focus was revenue generation. “Just last year it was Rs1,936 billion and we pushed it to Rs2,475 billion, that’s a 28 percent increase,” the finance minister said.Dar is here to attend the annual IMF-World Bank meeting.His delegation includes secretary Economic Affairs Division and governor State Bank.