To comply with a further condition the International Monetary Fund (IMF) placed on the FY-2023–24 budget, the federal government is considering raising the tax on all petroleum products.
Govt Hiking Petroleum Levy Rates: According to sources with knowledge of the situation, the Ministry of Finance has suggested hiking the tax rate by an additional Rs 10 per liter to raise around Rs 755 billion from this source for the fiscal year 2023–2024. PDL is now being sold at Rs—50 per liter.
According to them, the government set a goal of raising Rs855 billion through the petroleum charge in the current fiscal year.
They stated that the collection in the first nine months of this fiscal year only totaled Rs362 billion. The Ministry of Finance will change the finance bill in parliament to raise the petroleum levy.
IMF wants to reduce government spending.
The International Monetary Fund (IMF), which has recently communicated with Pakistan, has reportedly urged that federal and provincial governments cut spending.
According to sources, during pre-budget talks, the IMF wanted to fix the tax revenue target above Rs. 10,000 billion.
According to sources, Pakistan persuaded the lender to continue the talks virtually and asked about the personnel level agreement.
The IMF plans to conduct a joint 9th and 10th review of the loan package, but Pakistan desires a separate review specifically for the 9th review of the bailout package.
As the monetary fund reinforced its proposal to increase the FBR tax collection to 10,000 billion rupees, the sides reportedly discussed budget estimates. Additionally, it demanded actions to boost income tax recovery.
Pakistani negotiators assured the lender that the budget would set the FBR taxation target at $9,200 billion.
According to sources, the IMF team also sought a significant reduction in federal and provincial government spending. It pushed for restrictions on spending and subsidies in the budget for the upcoming fiscal year.
PM is optimistic about signing the IMF agreement this month
The administration is quite optimistic about concluding a deal with the International Monetary Fund (IMF) this month, according to Prime Minister Shehbaz Sharif.
According to Prime Minister Shehbaz Sharif, with the assistance of the people of Pakistan and other friendly and benevolent nations, his government was able to address the difficulties the country was facing in the best way possible.
The prime minister claimed in an interview with Anadolu News Agency on Monday that Pakistan has been dealing with a wide range of issues since April 2022, when the present administration assumed office following the defeat of former prime minister Imran Khan in a no-trust vote.
“We are very optimistic that the IMF program will be implemented. In Ankara, he told Anadolu, “Our ninth evaluation by the IMF will comply with all terms and conditions, and perhaps we’ll have some positive news this month.