ISLAMABAD: Aisha Ghaus Pasha, Minister of State for Finance today said that the IMF was not only convinced but also surprised at the speedy implementation of agreed steps.
Talking to media persons in Islamabad on Friday, Aisha Pasha said that the IMF has shown its satisfaction with the measures the government has taken to generate additional revenue of Rs170 billion.
On Wednesday, Finance Minister Senator Ishaq Dar presented the supplementary finance bill in the National Assembly.
With the enforcement of the mini-budget, the government will be able to sign a staff-level agreement with the IMF.
It will lead to the release of $1.1 billion tranche from the IMF and encourage other creditors and donors to provide financial assistance to Pakistan.
Minister of State also stated that the IMF officials were in touch with Pakistan’s friendly countries such as Saudi Arabia, the United Arab Emirates (UAE) and China, regarding their support to Pakistan.
Meanwhile,
Dar said the economic crisis triggered by the previous PTI government left the coalition government with no choice but to obtain loans from the IMF.
Pakistan seeks to fulfill the prerequisites for unlocking the $1.1 billion International Monetary Fund (IMF) loan.
Ishaq Dar presented a mini-budget, involving fiscal measures of Rs 170 billion through additional taxes as agreed with the International Monetary Fund (IMF). Below are the tax and fiscal measures proposed in the mini-budget.
Proposals
- Increase in GST on luxury items from 17% to 25%
- FED on business and first-class air tickets be increased to Rs20,000 or 50% — whichever is higher
- 10% withholding adjustable advance income tax to be imposed on marriage halls
- Increase in FED on cigarettes, soft and sugary drinks
- FED on cement to be raised from Rs1.5 kg to Rs2 kg
- Increase in GST from standard 17% to 18%
- GST to not be imposed on essential goods — wheat, rice, milk, pulses, vegetables, fruits, fish, eggs, meat
- BISP stipend to be increased; govt to allocate Rs400 billion for programme
After the NA session, Dar told media persons on Wednesday that the bill could be passed in both houses by Monday or Tuesday.
Dar did not forget to criticize the tenure of the Pakistan Tehreek-e-Insaf (PTI) government and said that a national committee should be set up to investigate the failures that have cost the country’s economy.
Approval of the mini-budget is inevitable for resuming the stalled IMF loans.
Earlier, in a bid to meet another major demand of the IMF, the coalition government introduced new taxation measures to generate more tax revenue.
The Federal Board of Revenue (FBR) has issued a notification to increase the tax rate on cigarettes and luxury items to meet another condition of the IMF.
The cabinet met on Tuesday evening and decided to impose Rs115 billion in taxes through the FBR.
Also, the remaining taxation measures would be incorporated through a mini-budget presented in the Parliament on Wednesday.
The FBR issued the Statutory Regulatory Order (SRO) to enhance the GST rate from the standard 17 to 18% and increase the Federal Excise Duty (FED) on cigarettes.
This will fetch an additional Rs115 billion out of Rs170 billion agreed to by the government in line with the IMF conditions.
Meanwhile, the government also okayed the increase in GST to 25 percent on hundreds of high-end luxury items through the Tax Amendment Bill 2023.
