ISLAMABAD (Reuters) - Pakistan on Monday appointed chartered accountant Syed Shabbar Zaidi the new chief of the Federal Board of Revenue after its top economic policy leadership was cleared out during bailout talks with the International Monetary Fund.
The previous head of the agency, Jahanzeb Khan, was sacked on Friday along with the head of Pakistan’s central bank, reflecting the turmoil in Prime Minister Imran Khan’s government as it grapples with a slowing economy, a weakening currency and soaring inflation.
Their removal comes only weeks after Finance Minister Asad Umar was asked to step down amid difficult talks with the IMF over what would be Pakistan’s 13th bailout since the late 1980s.
Poor tax collection and widespread evasion have been problems in Pakistan for decades. The IMF has been pressing the government to increase the tax its collects as it tries to reform the economy.
This year, the FBR is widely expected to miss a targeted 4,398 billion rupees ($31.19 billion) in revenue for the fiscal year ending in June, making it more difficult to cut a budget deficit the IMF expects will top 7 percent of gross domestic product in 2019.
Khan’s government has been frustrated by the low tax collection during its first year in office. The disappointing figures threatening his promises to build a welfare state for the poor.
The central bank forecast in March the economy would grow 3.5 to 4 percent in the 12 months to the end of June, well short of a government target of 6.2 percent. The IMF is more pessimistic, predicting 2.9 percent growth in 2019 and 2.8 percent next year.
Pakistan’s consumer price inflation in March rose to its highest since November 2013, 9.41 percent year-on-year, before easing to 8.82 percent in April.
($1 = 141.0000 Pakistani rupees)
Reporting by Asif Shahzad, editing by Larry King