Mini budget on the cards, IMF demands hike in tax on luxury items

ISLAMABAD: The International Monetary Fund (IMF) has demanded hike in tax over luxury items as announcement of a mini budget in the offing, citing sources ARY News reported on Saturday.

According to sources, the IMF has urged for increasing tax over luxury and unnecessary items as the government has assured the lender of announcing revenue generation steps in the next week.

There are proposals to increase tax over cigarettes, drinks and non-filers. A proposal also being considered about imposing federal excise duty over air tickets and enhancing 50 paisa per stick excise duty on expensive cigarettes.

Moreover, also being considered to enhance tax on energy drinks and slapping flood levy on banks income.

A proposal to enhance excise duty over non-filers on vehicles. It is also being mulled to hike the rate of the capital value tax on property and withholding tax on withdrawal of cash from banks for non-filers.

The International Monetary Fund (IMF) has expressed concern over fiscal indiscipline and mismanagement in government departments.

The global lender has expressed dissatisfaction over persistent losses in state owned entities, according to sources.

“There is lack of improvement in electricity and gas transmission losses,” IMF pointed out. “Pakistan continuously bearing losses in the energy sector,” IMF delegation observed. “It insisted for privatization of the state entities bearing losses,” sources said.

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, according to sources.

“IMF also demanding eliminating corrupt practices and retapes in government entities and business friendly and convenient tax collection mechanism,” sources said.

To meet another condition of the International Monetary Fund (IMF), the federal government yesterday 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.