ISLAMABAD, Feb 21 (Alliance News): International Monetary Fund (IMF) Resident Chief in Pakistan Mahir Binici has attributed the country’s economic challenges to its failure to generate sufficient revenue, particularly due to an uneven tax burden on the formal sector.
Speaking at a conference on “Retail Reimagined: Innovate, Collaborate and Thrive,” Binici emphasized that several sectors were not contributing adequately to the national exchequer, creating a larger fiscal burden.
His remarks come ahead of the IMF review mission’s visit to Pakistan in early March under the $7 billion Extended Fund Facility (EFF).
The success of the review is critical for Islamabad, which may need waivers for unmet conditions.
Additionally, the government must reach a consensus with the IMF on the key elements of the 2025-26 budget, as failure to do so could link the review’s completion to the budget’s approval by parliament.
Meanwhile, Federal Finance Minister Muhammad Aurangzeb highlighted that the retail sector contributes 19% to the GDP but only 1% to tax revenues.
He stressed that the formal sector, including salaried and manufacturing industries, is unfairly burdened, while agriculture, retail, and real estate must step up.
Aurangzeb warned of stricter enforcement against undocumented sectors evading taxes, stating that such disparities are unsustainable for Pakistan’s economy.
