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IMF Chief Flags Lower Tax Collection as Key Issue for Pakistan

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While praising Pakistan’s economic stability and reform efforts, International Monetary Fund (IMF) Managing Director Kristalina Georgieva highlighted the country’s low tax collection as a major concern.

Speaking on the sidelines of the COP28 summit, Georgieva pointed to Pakistan’s tax-to-GDP ratio of 12%, significantly below the recommended level of 15%. This shortfall, she stated, hinders the government’s ability to generate sufficient revenue for essential functions.

“We are saying it has to be at least 15% to have the revenues to sustain the functioning of Pakistan,” Georgieva emphasized. “I urge authorities to collect taxes that can pay them.”

The IMF chief’s statement underscores the importance of tax reform in Pakistan. A higher tax-to-GDP ratio would not only provide the government with additional resources for public services and infrastructure development but also contribute to greater economic stability and growth.

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Pakistan’s current economic situation demands a robust approach to tax collection. The government must explore effective strategies to broaden the tax base, improve tax administration, and combat tax evasion. This will require collaboration between the government, tax authorities, and the private sector to create a more efficient and equitable tax system.

Pakistan can strengthen its economic foundation and secure a brighter future for its citizens by addressing the issue of low tax collection. The commitment of the government to reform, as well as collaboration with stakeholders, will be critical in achieving this goal.



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