Islamabad: A breakthrough has been achieved in the talks between Pakistan and the International Monetary Fund (IMF) on Tuesday, as both sides agreed to increase the FBR target of tax collection by Rs $438 billion and cut down on proposed expenditures in the budget 2022-2023 “to achieve revenue surplus in the next fiscal year”.
Read: Miftah hopes to finalize IMF deal within a day or two
As the talks are underway between Pakistan and the Fund for the revival of the stalled Extended Fund Facility (EFF), the government complied with the IMF’s demands and agreed to impose a tax of Rs 1,200 on individuals earning between Rs 50,000 and Rs 100,000 in annual income. The government gave all its all to persuade the IMF but in vain.
For the upcoming fiscal year, it has been suggested that the FBR target be raised from Rs7,004 billion to Rs7,442 billion. To attain the revenue surplus of Rs152 billion, the expenditure objective was reduced.
In addition to increasing the FBR target and cutting down on expenditures to achieve a surplus, the two sides also reached an agreement on the major bone of contention; the petroleum levy.
According to media sources, the petroleum levy has also been revised and will now be charged at a rate of Rs 5 per litre per month. However, instead of Rs50 per litre, this has been progressively reduced to Rs30. The petroleum levy target has been slashed down from Rs750 billion to Rs550 billion.
Read: Miftah warns, Pak to default if subsidies not abolished till July
Now the IMF will share the MEFP on coming Friday or Monday. The financial tightening may be completed within the following few days. To comply with IMF guidelines, the State Bank of Pakistan (SBP) will also take further measures.
