Farkhund Yousafzai
ISLAMABAD: A Memorandum of Economic and Financial Policies (MEFP) received by the Government of Pakistan from the International Monetary Fund (IMF) included some harsh policy implementation conditions in exchange for the $1.2 billion dollar tranche.
The IMF has asked Pakistan to impose taxes amounting to Rs170 billion, minimize targeted subsidies in the gas and energy sectors, ensure zero addition in the gas sector’s circular debt, and raise the petroleum development levy on diesel to Rs50 through two Rs5 hikes on 1 March and 1 April.
It also demanded increasing allocation of BISP to Rs400 billion, allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage and increase tariff on electricity.
IMF proposes tax measures
It has proposed some measures for tax collection, including a supertax on high-earning persons and companies, a tax on sugary drinks (Rs60 billion could be collected), a tax on tobacco (Rs65 billion could be raised), and an increase GST by 1% that could fetch Rs55 billion.
Moreover, IMF has rejected a flood levy on imports and a one-time tax on bank deposits of the general public.
