Friday September 22, 2023

Deal with IMF ‘after budget approval’

Pakistan has agreed to apply Rs5 per litre levy on petroleum products

June 27, 2022
Deal with IMF ‘after budget approval’

ISLAMABAD: The talks between the Pakistani authorities and International Monetary Fund (IMF) staff will now resume after the approval of the budget for incoming fiscal year 2022-23, during which the two parties will strike a deal for a loan facility, it is learnt.

It may be recalled that the Fund confirmed major progress in Pakistan-IMF parleys last week. Sources in the Ministry of Finance said the talks are expected to resume on June 28, and Finance Minister Miftah Ismail and StateBank of Pakistan governor will sign the contract on Pakistan's behalf.

The sources stated that Pakistan has requested the IMF to enhance the programme to $8 billion instead of $6 billion and asked for an extension of a year to prolong the programme till 2024.

They said the budget for the next financial year will be around Rs10,000 billion, while 11 per cent sales tax will be levied on petroleum products with effect from July 1, 2022. Moreover, it has been decided to levy Rs50 per litre on petroleum products.

Pakistan has agreed to apply Rs5 per litre levy on petroleum products, raise the target of tax collection from Rs7,005 billion to Rs7,450 billion, target of customs collection from Rs950 billion to Rs1,005 billion and the target of General Sales Tax (GST) collection from Rs3,008 billion to Rs3, 300 billion. Moreover, the target for income tax collection has been set at Rs55 billion. The policy framework will be handed over to Pakistan in the next two days, sources added.