Islamabad, Feb 20: Cash-strapped Pakistan must take steps to ensure that its high earners pay taxes and only the poor get the subsidies if it wants to function as a country, the International Monetary Fund has said, amid looming fears of a default.
In an interview with the German state broadcaster Deutsche Welle on the sidelines of the Munich Security Conference in Germany on Friday, IMF chief Kristalina Georgieva said Pakistan needs to take strong measures to avoid getting into a “dangerous place” where its debt needs to be restructured.
She said the IMF was very clear that it wanted the poor people of Pakistan to be protected, the Dawn newspaper reported,
“It shouldn’t be that the wealthy benefit from subsidies. It should be the poor [who] benefit from them,” she said.
“What we are asking for are steps 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.
Pakistan was devastated by last year’s flash floods that affected one-third of its population, she said.
“I want to stress that we are emphasising two things. Number one: Tax revenues. Those who can, those that are making good money [in the] public or private sector need to contribute to the economy.
“Secondly, to have a fairer distribution of the pressures by moving subsidies only towards the people who really need it. It shouldn’t be that the wealthy benefit from subsidies,” she said.