ISLAMABAD : Senator Sherry Rehman, Vice President of Pakistan Peoples Party (PPP), raised recent concerns regarding the International Monetary Fund’s (IMF) alleged role in Pakistan’s resource allocation and stressed that there is no indication of the global money lender seeking to interfere in Pakistan’s constitutionally agreed frame of resource allocation.
“There is no indication that the IMF is proactively seeking to meddle In Pakistan’s constitutionally agreed resource allocation frame. Why would the IMF want to put itself in the middle of changing the NFC formula of Pakistan? It seems that it is the federal structure that cannot collect taxes, which incidentally the provinces are doing far better than the center.” Senator Rehman said.
She added that rather than further encroaching on provincial shares, the federal government should worry about improving tax collection through the Federal Board of Revenue (FBR).
“Since the 7th NFC Award, FBR taxes have remained stagnant in the range of 9% of the GDP, whereas provincial taxes have increased from 0.3% to over 1% of the GDP,” she pointed out.
Rehman added that aside from increasing the tax net, the provinces had also been surrendering a large surplus to the federal government over the last two years.
“In the larger national interest, so far the provinces have also not raised an issue on the federal government appropriating all taxes on petroleum through the petroleum levy rather than sharing these revenues if they were collected through the GST mechanism,” she said.