Pakistan has secured major relief from the International Monetary Fund (IMF) ahead of the federal budget after Prime Minister Shehbaz Sharif convinced the lender to soften several proposed fiscal measures, according to sources.
The prime minister reportedly briefed IMF Managing Director Kristalina Georgieva on Pakistan’s economic challenges and the financial difficulties faced by citizens. As a result, the IMF showed flexibility on several key budget proposals.
Relief for Salaried Class and Low-Income Families
Sources said the IMF agreed to provide significant relief to salaried individuals. Consequently, the government secured an estimated Rs60 billion in tax relief for the salaried class. The move is expected to reduce the tax burden on thousands of taxpayers and offer support amid rising living costs.
Meanwhile, the IMF also agreed to increase stipends under the Benazir Income Support Programme (BISP). This decision is likely to benefit low-income households across the country and strengthen social protection measures.
In addition, the development comes at a crucial time as the government prepares to unveil the federal budget for the next fiscal year.
Solar Panels and Stationery Get Tax Relief
In another important breakthrough, the IMF withdrew its demand to impose an 18 percent sales tax on solar panels and stationery items. Therefore, consumers may avoid additional financial pressure in these sectors.
Sources indicated that the government’s proposal to maintain a lower tax rate on solar panels remains under consideration. At present, a 10 percent sales tax on solar panels is likely to stay in place in the upcoming budget.
Similarly, students and parents received relief as authorities are unlikely to introduce the proposed 18 percent sales tax on stationery products.
Furthermore, sources said the government is not expected to make major changes to the existing tax structure for the stock market and tobacco sector. The developments emerged as Pakistan and the IMF concluded key budget discussions.
