Pakistan must broaden tax base to achieve durable growth: IMF

Mettis Global reported that the International Monetary Fund has urged Pakistan to move from temporary adjustments to lasting growth by widening its tax base. Jihad Azour, the IMF's Director for the Middle East and Central Asia, made the remarks while speaking at the Pakistan Tax Conference in Islamabad. He also called for stronger revenue administration, fewer tax expenditures and continued protection of priority social spending.

According to the IMF official, the country has made solid headway in regaining economic stability and shoring up its external cushions. Even so, it still faces high inflation, fiscal strain, sensitivity to energy and food costs, and tighter global financing. The reform effort is backed by the IMF's Extended Fund Facility, known as the EFF.

Azour argued that a simpler, more neutral and predictable tax system would cut the cost of formal activity, improve resource allocation and encourage firms to invest. On fairness, he said compliance improves when rules are clear and informality or special treatment is not rewarded. Doing so requires tackling sectors that are taxed too lightly, scaling back concessions and spreading the tax burden proportionally.