IMF asks Pakistan to 'do more' for revival of stalled loan programme

ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to ‘do more’ for the revival of stalled loan programme as technical talks have been completed in Islamabad, ARY News reported, citing sources.

During the technical talks, the IMF team remained committed to its demands with regard to increasing General Sales Tax (GST) from 17 to 18 percent on all goods with a point of view that a one percent GST hike will help in collecting another Rs 39 billion, sources added.

The IMF has also emphasized the Pakistani team not only for the abolishment of income tax exemption but to impose a Flood levy to meet FBR’s revenue target in the current fiscal year of 2022-23.

The Fund has also demanded of the Pakistani authorities to increase flood levy on the profit earned by the banks.

The government team will also give a roadmap for the privatization program during the policy talks, sources added.

Read more: Pakistan, IMF to hold another round of talks over economic data

It was further learnt that the IMF agrees to subsidize energy-related tariffs in the Kisan package as well as the Balochistan tube well scheme.

The IMF has also asked the Pakistani government to withdraw energy-related subsidies to the export sector, however, provinces will be free to subsidize the export sector on their own.

IMF has also demanded to cut PSDP budget and non-developmental expenses, while the decision on the sales tax or GST on petroleum products is yet to be taken.

During the technical level talks, the Pakistani government has agreed to bring down the energy circular debt up to Rs1,000 billion, the sources privy to the development said.