ISLAMABAD: Pakistan has approved Rs 300 billion for new taxes to the IMF.
According to sources, the government has assured the IMF of revenue growth, reduction of existing debt and cost reductions with energy savings and budget cuts along with economic and energy sector reforms.
The Federal Board of Revenue (FBR) has informed the IMF through the Tax Laws Amendment Ordinance 2023 of proposals for new tax measures worth around Rs 300 billion. This will result in an increase of five to five and a half billion rupees in revenue and non-tax revenue initiatives.
Negotiations between Pakistan’s economic team and the IMF on the Ninth Economic Review are ongoing and the policy-level talks are expected to be completed next week with bright prospects of reaching an agreement with the IMF.
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According to the sources, the IMF has called the delay in economic reforms, increase in debt, inflation, decrease in foreign exchange reserves as a threat to Pakistan’s economy. Also emphasized.
Sources said the government has endorsed the IMF’s measures to raise revenue next week, including a proposal to increase the federal excise duty on cigarettes, liquor and airline tickets by 50 paise per cigarette. Tax energy drinks and introduce a bank income tax.
A total of around Rs 300 billion of additional revenue measures have been proposed and additional revenue measures will be added as per the agreed measures, sources said, adding that a proposed mini-budget was presented at the FBR talks, which was reviewed. went. Description
In the meeting, the updated debt management plan to reduce the circular debt of the power sector, increase in electricity and gas prices and other issues were discussed and the IMF was informed that the circular debt management plan has also been prepared. Is. Approved. Sent to ECC.
The IMF was also informed that a refinancing summary for the power holding company to reduce revolving debt and mark-up for repayment of Rs 285 billion revolving debt has also been sent to the ICC, while the grade 17 Notification of -22 has already been issued. Issuance of asset declaration lists of government employees.
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The IMF has urged Pakistan to reduce electricity subsidies and power losses while improving recovery. The proposal to increase the price of electricity by Rs 7.5 to Rs 10 per unit was also reviewed and I also approved the increase in a phased manner.
According to Finance Ministry officials, there is a plan to increase electricity rates by Rs 3 per unit by March and another 70 paisa by May. Apart from the fuel price adjustment, the price of electricity may gradually increase by Rs 6 per unit till August 2023.
According to the authorities, there will be a shortfall of 952 billion rupees this fiscal year, there is also a plan to end the subsidy of 675 billion rupees, and 200 billion rupees will be collected from the consumers by increasing the tariff. .
The review mission of the International Monetary Fund has been informed that the implementation of the conditions agreed with the IMF under which the notification of rules on disclosure of assets of government officials has been issued, while Rs 50,000 instead of Rs 300,000. Almost new people have also been added to the tax network. With this, the tax collection target for January has also been met.
