Pakistan has proposed increasing the levying general sales tax on petroleum products and increasing the petroleum prices.
As the negotiations between Pakistan and the International Monetary Fund (IMF) started the head of IMF Nathan Porter suggested increasing the general sales tax (GST) on petroleum products.
On the first day of technical-level talks, Pakistan was urged to increase the levy to 70 rupees and impose a general sales tax (GST) on petroleum products.
The IMF team, led by Nathan Porter, arrived in Pakistan and held initial discussions.
The IMF delegation met the officials from the Federal Board of Revenue (FBR), the Ministry of Finance, the State Bank of Pakistan, and the Ministry of Energy.
The main agenda of the meeting is to discuss the shortfall in FBR targets and reforms of the energy sector. Whereas, the suggestion to increase GST will increase the pressure on Pakistan to introduce a mini-budget.
Media sources have reported that the IMF has proposed imposing a GST on petroleum products, which currently has a zero rate, along with a levy of 60 rupees per liter, expected to rise to 70 rupees.
Sources also indicate that tomorrow’s discussions will focus on meeting FBR targets and new tax measures.
In addition, the agenda includes external financing, the privatization program, and the potential privatization of PIA.
According to the Finance Minister, if the tax revenue can’t be increased, the tax on the salaried class and industries will soar.
It should be noted that the IMF delegation will remain in Pakistan till November 15, which will be updated on the economic performance for the first quarter.
