Disparity in society

IN her remarks to a German broadcaster on the sidelines of the Munich Security Conference last week, IMF managing director Kristalina Georgieva set out the agenda for good fiscal governance in Pakistan. “What we are asking for are steps that 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. Her advice: tax those who are earning well in both the public and private sectors and give subsidies only to the poor who actually need it. That the IMF chief’s statement has come at a time when Islamabad is struggling hard to close the deal with the international lender for the restoration of the loan programme, amid fears of defaulting, shows that differences between the two sides are far from settled. From her talk it has also become evident that the IMF is not satisfied with the increase in the consumption tax rate and wants the government to enhance income tax on the rich. But it is still uncertain whether the IMF is asking only for an increase in income tax rates on existing taxpayers or is pressing for broadening the net and pulling in all those who have evaded paying their dues or who have undertaxed incomes from real estate, retail, agriculture, etc. Hopefully, this should become clear in the coming days.