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Tuesday, March 15, 2011

Govt imposes 15 pct flood surcharge on tax

ISLAMABAD: The federal government on Tuesday issued a notification of imposing a flood surcharge of 15 percent on income tax in order to tackle the country's widening budget deficit.

The decision was taken in the wake of government’s talks with the International Monitory Fund (IMF). The surcharge would be implemented with immediate effects and would be effective till June 2011.

Pakistan, whose tax-to-GDP ratio is around 10 percent, one of the world's lowest, is trying to show the IMF and other donors that it is working on ways to boost revenue.

The country is dependent on foreign aid, and riven with political instability and violence. The struggling government, still contending with damage from disastrous floods last year, is desperate to raise money.

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