The International Monetary Fund (IMF) has recommended that the Pakistani government consider imposing taxes on stationery items, such as books and pens. Sources within the finance department have indicated that the IMF has suggested ending tax exemptions on various stationery products, including paper, sticky notes, cardboard, and others.
It’s reported that officials from the Federal Board of Revenue (FBR) will brief the prime minister on the fiscal year 2024-25 budget tomorrow. The proposed budget is likely to phase out exemptions on sales and income tax.
Additionally, the government is contemplating imposing sales tax on agricultural essentials like tractors and pesticides, potentially leading to price increases for these products. Currently, pesticides and their active ingredients registered by the Department of Plant Protection are exempt from sales tax under the Sixth Schedule of the Sales Tax Act.
On Monday, the IMF released an official statement following discussions with Pakistan. The statement confirms Islamabad’s formal request for a new loan program from the IMF.
During the IMF delegation’s visit, led by Mission Chief Nathan Porter from May 13 to May 23, extensive negotiations were held regarding Pakistan’s economic improvements.
The statement underscores Pakistan’s efforts to increase revenue and stresses the importance of fair tax collection from privileged sectors. The IMF reaffirms its commitment to supporting sustainable economic growth through the Extended Fund Facility (EFF) program.
Pakistan’s successful fulfillment of targets set under the Standby Arrangement Agreement will bolster the upcoming new loan program.
Expanding the tax net is deemed crucial for economic growth and stability, as emphasized by the IMF. The statement calls for appropriate policy measures to control inflation and stresses the urgency of energy sector reforms.
Reducing energy production costs and implementing a stringent monetary policy are essential until inflation is under control, according to the IMF. Furthermore, the IMF emphasizes the need to enhance the performance of state-owned enterprises and suggests privatization as a means to improve efficiency.
