Pakistan, IMF reach consensus over govt employees’ salaries

ISLAMABAD : After days of negotiations, Pakistan and the International Monetary Fund (IMF)  have finally reached consensus agreement over the issue of increase in salaries of government employees in the upcoming 2020-21 fiscal year budget. According to details, the third round of budget talks between Pakistan and IMF was held in Islamabad today in which IMF was agreed over the increase in salaries of government employees. Pakistan has also managed to persuade the IMF for an increase in pension of retired employees. The International Monetary Fund has also agreed on not increasing electricity bills and gas tariff till October. Islamabad has assured IMF that it will also increase non-tax revenue. Earlier, the International Monetary Fund (IMF) had urged Pakistan to freeze the salaries of government employees and follow the path of fiscal consolidation by showing a nominal primary deficit in the new budget. The Pakistan government is set to unveil the budget on June 12. It was revealed on June 6 that the federal government had decided to present a tax-free budget for the fiscal year 2020-21.Sources privy to the matter said that the government will not introduce any new tax in the forthcoming budget while harsh measures will be taken to curb tax evasion. Federal Board of Revenue will be given special directions/powers to stop tax evasion in the country. The government will curtail its expenditures and will not increase pension of the retired government employees, the sources added. “International Monetary Fund (IMF) is emphasizing the government to set Rs5,100 billion tax collection target for the fiscal year 2020-20 while the Finance Division proposed to set target of Rs4,600 billion.