ISLAMABAD: According to sources, the Pakistani government has given assurances to the International Monetary Fund (IMF) regarding the implementation of new taxes, amounting to Rs18 billion monthly, as part of efforts to meet the IMF’s “do more” demands. These measures are expected to address a shortfall in tax collection, with the government specifically targeting the textile and sugar sectors for additional taxation.
The caretaker government has shared a comprehensive plan with the IMF, outlining a tax collection target of Rs11,000 billion. As part of this strategy, there is a proposal to increase the Goods and Services Tax (GST) on textiles and leather goods from the current 15% to 18%.
In a related context, on January 17, Pakistan received a significant financial boost with a $700 million loan tranche from the IMF under the nine-month Stand-By Arrangement (SBA). This disbursement followed the successful completion of the first review of Pakistan’s economic reform program by the Executive Board of the IMF.
The Board’s decision allowed for an immediate disbursement of around $700 million, bringing the total disbursements under the arrangement to approximately $1.9 billion. This positive development was a result of a staff-level agreement reached between the Fund and Pakistan on November 15, 2023, highlighting the nation’s commitment to implementing key economic reforms.
The ongoing engagement with the IMF and the implementation of new tax measures reflect Pakistan’s dedication to meeting economic targets and maintaining financial stability.
