Mini-Budget Draft shared with IMF
Pakistan has shared a draught mini-budget of Rs200 billion with the International Monetary Fund (IMF) in order to persuade it to restart the stalled loan program.
According to Finance Ministry sources, the virtual meeting between Finance Ministry officials and the IMF was also held on Wednesday. According to sources, Pakistani authorities have presented a comprehensive plan on proposed tax measures for the remainder of the current fiscal year.
Sources further said that the Federal government led by Prime Minister Shahbaz Sharif has devised a plan to collect additional Rs200 through tax measures to convince the IMF to resume the stalled loan program.
The authorities have shared the plan and informed that the government will most likely introduce a mini budget through ordinance in the coming days, with sources stating that the government is considering implementing the mini budget on February 1, 2023. They also stated that the government is preparing to issue a Presidential Ordinance imposing Rs200 billion in taxes.
The IMF team was also informed by Pakistani authorities that the government intends to collect Rs100 through the implementation of the Flood Levy during the remainder of the current fiscal year.
Several luxury items are likely to face additional duties from the government. The government was also considering withdrawing tax breaks granted on Rs70 billion in goods.
It has been proposed to levy a “flood levy” on non-filers’ banking transactions. Meanwhile, a ‘withholding tax’ on bank transactions exceeding Rs.50,000 per day was proposed.
However, the proposed tax will not be applicable to individuals included in the Active Taxpayers List.
According to them, the government estimated Rs.50 billion in withholding tax on non-filers.
According to the sources, the Pakistani authorities have also shared a plan to implement a sales tax and a full petroleum levy on petroleum products under the agreed-upon plan in June 2022.
These tax measures will be taken after formal approval of Prime Minister Shahbaz Sharif, sources said.
According to sources, the IMF will send a team to Pakistan to resume talks following the ordinance’s promulgation.
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