Pakistan’s poor people should be benefitting from the subsidies, not the wealthy people, International Monetary Fund Managing Director Kristalina Georgieva said.

“It shouldn’t be that the wealthy benefit from subsidies. It should be the poor [who] benefit from them. And there the Fund is very clear. We want the poor people of Pakistan to be protected,” she told Deutsche Welle Asia on the sidelines of the Munich Security Conference on Friday.

This comes against the backdrop of the “so-called” mini-budget presented by Finance Minister Ishaq Dar in the National Assembly on February 15. The ruling coalition imposed Rs170 billion worth of taxes in order to unlock the $1.1 billion worth of IMF funding.

Two measures – raising the federal excise duty on cigarettes and increasing the general sales tax rate from 17 per cent to 18% – were immediately implemented through statutory regulatory orders. The Federal Board of Revenue is expected to generate Rs115 billion from these two measures.

“My heart goes to the people of Pakistan. They have been devastated by the floods that affected one-third of the population of the country,” she started while speaking about the country.

Georgieva added that the international lender was demanding Pakistan take steps that needed to take to be able to function as a country and not get into a dangerous place where its debt needed to be restructured.

The flood-hit country raised more than $10 billion at International Conference on Climate Resilient Pakistan last month in Geneva.

“I want to stress that we are emphasising two things. Number one, tax revenues. Those who can, those that are making good money [in the] public or private sector need to contribute to the economy. Secondly, to have a fairer distribution of the pressures by moving subsidies only towards the people who really need it,” Georgieva added.