Madagascan President Marc Ravalomanana has threatened to halt cooperation with the International Monetary Fund (IMF) if it refused to support his tax amnesty decree on the eve of the independence day which fell on June 26.
The president made the statement here on Friday when he met the senators in a working session to discuss the socioeconomic development process of the country.
In his national speech on June 25, Ravalomanana announcing an amnesty to individuals and companies which had not paid their tax for years.
The president informed the senators of IMF position concerning his tax amnesty decision, according the French-language daily, L'Express, on Saturday.
Ravalomanana delivered a national speech, announcing a grant amnesty to those who had not paid their tax.
IMF threatened to stop its support to the ongoing economic reform in the island country unless Antananarivo withdraws its tax amnesty decision.
Ravalomanana defended his decision, threatening that he would break up with the IMF if it tried to create obstacles to the implementation of the tax amnesty.
He even implied that in case of continued objection from IMF, his government would try to find other source of financing.
Shortly after the announcement by the president, IMF residential representative to Madagascar, Pierre Van den Boogaerde, just replied that he would think about the president's statement.
However, Boogaerde said his office was studying details and the feasibility of the president's decision.
IMF officials reportedly said two cases were possible either IMF stops its financial support to Madagascar, but it would continue to fulfill its macroeconomic control obligation or the relationship between IMF and Madagascar would quite simply break off.
A break-up with IMF may have serious repercussions on the state budget and the economy in general, which may also lead to an eventual breakdown with other traditional backers that cooperate with IMF as Madagascar still depends heavily on external aid.
A menace from Madagascar's highest authority at IMF may have unfortunate consequences on the image of the country itself.
Source: Xinhua
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