The International Monetary Fund (IMF) has turned down Pakistan’s request to lower the General Sales Tax (GST) on electricity bills. This decision makes it harder for Pakistan to give financial relief to consumers during economic reforms.
Sources say the IMF also rejected Pakistan’s proposal to extend winter relief for the industrial and agricultural sectors for the entire fiscal year.
Discussions between Pakistan and the IMF are still ongoing about how to manage circular debt in the energy sector. Pakistan has informed the IMF about its plan to address this issue by borrowing Rs1.25 trillion from commercial banks at an interest rate of 10.8%. A deal for this loan has been reached.
There are also plans to introduce tax relief for the real estate, property, beverage, and tobacco industries. If approved by the IMF, taxes in these sectors will be reduced.
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For the upcoming budget, proposals include tax cuts for salaried individuals.
Additionally, the government aims to generate Rs250 billion in tax revenue from various sectors, including retail. However, all proposed measures require IMF approval before implementation.
