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To Restart Stalled Loan Program, IMF Team Remained Committed To Its Demands

ISLAMABAD: As technical talks have concluded in Islamabad, the International Monetary Fund (IMF) has asked Pakistan to “do more” to restart a stalled loan program.

Sources added that the IMF team remained committed to its demands regarding an increase in General Sales Tax (GST) from 17% to 18% on all goods, with the view that an increase of 1% in GST will help collect an additional Rs 39 billion.

In addition, the IMF has emphasized the Pakistani team’s efforts to impose a Flood levy in order to meet the FBR’s revenue target for the current fiscal year, 2022-23.

The Fund has also requested that the Pakistani government raise the flood tax on banks’ profits.

Sources added that the government team will also provide a plan for the privatization program during the policy talks.

In addition, it was discovered that the IMF agrees to subsidize energy-related tariffs in the Balochistan tube well program and the Kisan package.

The IMF has also asked the Pakistani government to stop providing export sectors with energy-related subsidies; however, provinces will be free to provide export sector subsidies on their own.

The IMF has also demanded that PSDP budget and non-developmental expenses be reduced, and no decision has been made regarding the sales tax or GST on petroleum products.

According to sources with knowledge of the situation, the Pakistani government has agreed to reduce the energy circular debt by up to Rs1,000 billion during the technical level talks.