Pakistan told IMF it cannot increase tariffs or taxes: Finance Minister Shaukat Tarin

Pakistan has informed the IMF that it was not possible to raise tariffs or taxes under the global money lender's ongoing program, newly-appointed Finance Minister Shaukat Tarin said on Wednesday.

"At this time, we don't have the capacity to increase tariffs or [adopt] incremental taxes, our common man is completely fed up with this inflation," Tarin said while addressing his first press conference as finance minister.

He said that this stance was conveyed and both the World Bank and the International Monetary Fund (IMF) had been very sympathetic to it.


Tarin, however, clarified that Pakistan was not leaving the IMF program which was agreed in 2019 when it decided to provide USD 6 billion under a 39-month extended arrangement under the Extended Fund Facility (EFF) for Pakistan.

Increase in taxes and tariffs were among several conditions agreed with the IMF in 2019.

"We have to tell them that we won't come out of the IMF programme but give us some space and we will change the method. Tariff increase is not the only way to raise money," he said.

He said that any increase in tariffs and taxes would have a cascading effect and inflation would increase once fuel charges were increased, thus further burdening the people.

"We have discussed with them (IMF) and told them that our revenues were increasing at 92 per cent but the third wave of Covid came and they decreased after that...We will apologise to them on this and they are sympathetic to us," he said.

Tarin was appointed as finance minister last month. He is the fourth minister to take charge of the key ministry with the hope to stabilize the economy and ease the burden on the poor - a feat which his three predecessors failed to perform.

He said a few days ago that Pakistan needs to grow at least 5 per cent to survive. However, the country registered negative growth last year.

Tarin said that the China-Pakistan Economic Corridor had great potential to expedite growth along with the IT, housing and agriculture.

He said Pakistan can do a lot in IT and this "can be a game changer for us in the next five to 10 years."