IMF softens stance on Kisan Package, Balochistan tube wells subsidies

ISLAMABAD: The International Monetary Fund (IMF) has softened its stance over subsidy in ‘Kisan Package’ and Balochistan tube wells in energy sector, citing sources ARY News reported on Sunday.

According to sources, the IMF also prepared to keep subsidy for Azad Kashmir intact.

Sources said that the energy subsidy to exporters will be removed. “There are differences with the IMF over tax revenue shortfall,” according to sources.

“IMF deems taxes shortfall upto 840 billion rupees, while Pakistani officials keeping taxes deficiency between 400 to 450 billion rupees,” sources said. “Pakistan has floated steps to address this shortfall of taxes,” finance ministry officials further said.

“Development budget and other expenditures are likely to be slashed,” sources said.

“International Monetary Fund has also suggested hike in GST from 17 to 18 percent, while tax will also be imposed on banks profit and the flood levy,” sources said.

The sides have also been in talks over removing relief in the GST and the income tax, according to sources.

“The matters with the IMF will be decided by May 09, while dialogue over the medium-term budgetary framework with the lender will begin from Feb. 07”.

The IMF has demanded hike in tax over luxury items, there are proposals to increase tax over cigarettes and drinks. A proposal also being considered about imposing federal excise duty over air tickets and enhancing 50 paisa per stick excise duty on expensive cigarettes.

The monetary fund has also demanded restricting the state interference in the economy by privatization as well as it insisted for regular audit in government departments.

To meet another condition of the International Monetary Fund (IMF), the federal government has made it mandatory for all government officials of grade 17 and above to declare their assets.

A notification to this effect was also issued by the Federal Board of Revenue (FBR).

According to the notification, the government has also asked public servants to submit details of their overseas assets. “All 17 to 22 Grade officers have to provide all information before opening a bank account,” the notification read.