IMF Urges Pakistan to End Sales Tax Exemptions on Petroleum Key Policy Recommendations
As per details, the Monetary Fund has asked Pakistan to end sales tax relaxation on all items including petrol.
The newly elected government of Pakistan should also implement a sales tax on petroleum products along with a Rs 60 levy to increase the tax income.
Earlier, the International Monetary Fund (IMF) recommended the government of Pakistan implement an 18 percent General Sales Tax (GST) on food, medicine, petroleum products, and stationery.
The IMF also recommended bringing several dozen items under the standard rate of 18% GST, including unprocessed food, stationery, medicine, POL products, and others.
The IMF estimated that rationalizing GST rates could generate 1.3 percent of Gross Domestic Product (GDP) revenue, which equates to Rs1,300 billion in national exchequer.
It is pertinent to mention here that IMF and Pakistan reached a staff-level agreement on the second and final review under Pakistan’s Stand-By Arrangement.
According to the official statement issued by an International Monetary Fund team led by Nathan Porter, IMF reached a staff-level agreement with Pakistan on the second and final review of the country’s stabilization programme supported by the IMF’s US$3 billion (SDR2,250 million) SBA approved.
“Pakistan’s economic and financial position has improved in the months since the first review, with growth and confidence continuing to recover on the back of prudent policy management and the resumption of inflows from multilateral and bilateral partners,” Porter said.
