The International Monetary Fund (IMF) has rejected Pakistan’s proposal to reduce the General Sales Tax (GST) on electricity invoices.
The IMF’s decision raises challenges to Pakistan’s efforts to provide financial relief to consumers in the midst of ongoing economic reforms, said Express News on Friday.
According to the sources, the global lender also rejected Pakistan’s request to extend the winter aid package for industrial and agricultural sectors throughout the fiscal year.
Meanwhile, discussions between Pakistan and the IMF continue with respect to measures to reduce circular debt in the energy sector.
Pakistan informed the IMF about his plan to address the circular debt by obtaining a loan of RS1.25 billion commercial banks at an interest rate of 10.8%. According to reports, an agreement on this loan has been completed.
In addition, the proposals are being considered to provide fiscal relief to the real estate, properties, drinks and tobacco sectors. If the IMF approves it, fiscal loads in these industries will be reduced.
For the next budget, there are suggestions to reduce tax burdens in salaried individuals.
Meanwhile, there is a plan to collect RS250 billion in taxes from several sectors, including retail trade. The final approval for all proposed measures will be subject to the approval of the IMF, the sources said.
