Other pre-conditions of the next bailout package include increasing electricity prices and adjusting gas prices from July.
Saturday 25 May 2024
Islamabad (Urdu Point Newspaper Latest. May 25, 2024) The demand from the IMF to impose 18% sales on all commodities has put the government in trouble, among other pre-conditions of the next bailout package, electricity prices from July. It also includes increasing and adjusting gas prices. According to Express News, according to the conditions of the IMF, the tax collection target of the Federal Board of Revenue (FBR) has to be set at around 12,900 billion rupees.
The Rs 12.9 trillion target means the FBR will have to collect an additional Rs 3,700 billion a year in just one year. The IMF has linked the new bailout package agreement with the prior approval of the Executive Board. The Ministry of Finance had told the Prime Minister that the tax targets for the next fiscal year is 12.4 trillion rupees, which has been increased to 12.9 trillion rupees.
After the withdrawal of the IMF mission, the Finance Ministry briefed the Prime Minister on the overall size of the budget and the terms of expenditure.
The prime minister was told that if Pakistan implements the condition of withdrawal of sales tax exemption, 18 percent sales tax will be levied on all goods sold in Pakistan, except essential foodstuffs and those protected under sovereign treaties. An agreement with the IMF is not possible without withdrawing all sales tax exemptions, the Prime Minister was told.
The Prime Minister did not make an immediate decision after knowing the conditions of the IMF, but asked the Ministry of Finance to review these measures. It should be remembered that yesterday, IMF Mission Chief Nathan Porter said that he wanted fair tax collection in Pakistan. Reforms in the energy sector are essential in Pakistan. Monetary policy should be used to control inflation.
The talks between Pakistan and the International Monetary Fund (IMF) ended, after which the mission chief of the IMF issued a statement on the talks. The IM chief further said that the improvement of Pakistan's economy. Long negotiations were held with Pakistan from May 13 to May 23. Government of Pakistan wants to increase revenue. There was also a detailed discussion on the privatization of government corporations. Policy negotiations with Pakistan will continue.
