Govt agrees to cut development budget in talks with IMF
Pakistan on Monday agreed to the visiting International Monetary Fund (IMF) mission’s demand for fiscal adjustments in a bid to unlock funds critically needed for the ailing economy.
While Gilgit-Baltistan and Azad Kashmir, the Kissan package, and Balochistan’s tube well scheme will continue to receive subsidies in the energy sector, Islamabad has agreed to reduce the development budget and ongoing costs.
It is important to note that the IMF has been in Islamabad since January 31 for fiscal policy talks to resume the release of more than $1 billion from the $6.5 billion bailout package that was signed in 2019 by the Imran Khan government.
Up until February 9, the IMF mission will remain in the capital.
Both sides agreed that provincial governments will be free to provide export sector subsidies on their own.
No decision on the gasoline tax The IMF has proposed increasing the GST from 17% to 18%, but no final decision has been made regarding the sales tax or levy on petroleum products.
The Pakistani negotiators were asked by the international lender to end the income tax exemption this year.
Reforms at the FBR According to officials at the Federal Board of Revenue, bank profits will also be taxed while the bureau implements sustainable reforms.
