Monday, December 4, 2023

IMF asks Pakistan to implement anti-money laundering laws

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The International Monetary Fund (IMF) has urged Pakistan to ensure the rigorous enforcement of anti-money laundering laws, according to reports from Pakistani news channel ARY News. Officials from the Federal Board of Revenue (FBR) and the State Bank of Pakistan (SBP) briefed the IMF on anti-money laundering efforts and suspicious bank transactions during discussions in Islamabad related to the next review for the disbursement of a USD 700 million loan tranche.

Sources indicate that the SBP provided information on Pakistan’s economic performance from July to March, while FBR officials presented a report on tax crimes. The IMF staff advised Pakistan to formulate a clear policy for detecting ‘suspicious transactions’ in tax crimes and recommended the inclusion of clauses for strict punishment in the upcoming finance bill.

During the briefing, the delegation was informed that Pakistan is already imposing severe penalties and freezing bank accounts to combat money laundering, as reported by ARY News. The IMF mission emphasized the need for the FBR to rigorously enforce measures to curb money laundering.

In a recent development, the IMF has reportedly called for increased recovery of income tax from the retail and real estate sectors and a higher income tax collection on agricultural income. The IMF has urged collaboration between the federal government and provinces to enhance tax recovery efforts. The ongoing review of the USD 3 billion stand-by arrangement (SBA) has also seen discussions about bringing agriculture, real estate, and retail sectors into the tax net. The IMF is expected to recommend additional measures after reviewing Pakistan’s tax collection plan, which has been shared with the global lender’s team during the talks. Both sides have identified potential areas for addressing financing shortfalls and agreed on further measures if the FBR falls short of achieving its tax collection target.

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