IMF Pushes Pakistan to Reform Taxes, Broaden Base, But Impact Unclear

• IMF asks Pakistan to remove distortionary tax policies including minimum taxes, surtaxes, and compliance measures • Recommends rationalizing GST rates which could yield Rs1,300 billion in revenue • Suggests eliminating zero ratings under Fifth Schedule except exports, and reducing exemptions under Sixth Schedule • Advises removing reduced GST rates under Eighth Schedule and bringing most goods to standard 18% rate • Does not assess impact of tax changes on masses or inflation