Pakistan: IMF asks Pak for changes in personal income tax

The International Monetary Fund (IMF) has reiterated the changes in personal income tax in Pakistan amid the continuing economic downturn in the country.

This comes after a staff mission of the international lender held the first round of discussions with tax officials last week and raised the issue of reforms in the personal income tax to raise maximum revenue, the Dawn newspaper reported.

Last year, the ruling government did not accept the same demand of the IMF.

These demands are part of the seventh review of the USD 6 billion of the Fund Extended Fund Facility (EFF).

In the wake of the sixth review, the government withdrew tax exemptions worth Rs 343 billion as against the IMF demand of Pakistani Rupees 700 billion.

The IMF has demanded to reduce the salary income tax slabs from the existing 12 to six with an increase in the rates. According to the Pakistani newspaper, the demand is one of the conditions for consideration in the next budget.

As per one of the proposals the burden of tax payment would be decreased on the lower-income ceiling earning PKR 600,000 per annum, while tax incidence would be increased on those who are earning over PKR 300,000 per month basis, Dawn newspaper reported.

At the same time, it is also proposed to bring reforms in Provident Fund and other allowances for taxation.

(ANI)