Friday, December 1, 2023

Government to impose Rs.200 Billion Taxes to Comply with IMF Conditions

Pakistan has prepared two draft ordinances to impose Rs 200 billion in new taxes, days after it accepted the International Monetary Fund’s (IMF) demands in order to resume a stalled loan programme. The drafts are a bid to overcome the worst economic crisis in the country after Pakistan accepted IMF demands.

In this regard, an official of the Federal Board of Revenue (FBR) stated that the country’s top tax machinery has prepared both ordinances, one of which is the imposition of Rs 100 billion in taxes and the other a Rs 100 billion flood levy on imports.

There would be a surge in withholding tax rates and regulatory duty on luxury items to generate additional revenue amid the continuous devaluation of the rupee. The flood levy collected will be used to curb a shortfall in the petroleum development levy (PDL).

While an IMF delegation is scheduled to arrive in Islamabad on January 31 for discussions, following the assurance from Prime Minister Shehbaz Sharif to implement policy measures.

On the other hand, the centre is considering ending the power sector subsidy and implementing a sales tax on raw materials for the export sector, particularly for textile manufacturers. These measures may cause concern among the PML-N’s key supporters during an election year. Additionally, increases in electricity and gas tariffs are being considered as well.

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