ISLAMABAD: The International Monetary Fund (IMF) and Pakistan will begin policy-level talks on the bail-out package today, ARY News reported citing sources.
As per details, the International Monetary Fund (IMF) has asked Pakistani authorities to impose tax on monthly pensions exceeding Rs 100,000.
The monetary fund demanded stringent economic measures for new loan program and legislation aimed at taxing wealthy pensioners.
According to sources, Pakistan has no alternative plan to the IMF loan program, and the government will need to implement the agreed-upon reforms to secure the loan.
Sources said that the new program aims to reduce subsidies from Rs 1,550 billion to Rs 800 billion and limit gas subsidies.
Additionally, electricity prices may also increase by 10-12%, and retail businesses will be required to document sales and prevent tax evasion, sources added.
READ: IMF asks Pakistan to ‘impose’ tax on monthly pensions
Non-filers will face increased difficulties under the new program, and the government will need to take decisive action to address the economic challenges the country is facing.
The IMF will review Pakistan’s economic progress before approving the loan, and the government will need to control expenditures and losses to secure the loan.
Last week, the IMF mission has ‘asked’ Pakistani authorities to increase general sales tax (GST) to 18 percent.
The demand was put forward by the IMF during four round of talks with Pakistan authorities for a fresh loan.
IMF mission observed that Pakistan’s sales tax collection system is facing problems as the center is collecting sales tax on the commodities, while the provinces are on the services.
They suggested sales tax collection should only be done by the federal government. The international lender also demanded to end GST exemption and increase it to 18 percent on the commodities and services, the sources said.
During the fourth round of talks, the IMF mission also demanded Pakistan for reforms in the Insurance Sector and formation of a separate regulatory body. The fund also demanded privatisation of three government-owned insurance companies.
The International Monetary Fund (IMF) delegation is currently in Pakistan as Islamabad is interested in taking another programme from the international lender to address the finance shortage.
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