IMF wants Pak to decrease circular debt by increasing prices on utilities

The International Monetary Fund (IMF) has asked Pakistani authorities to decrease the circular debt and electricity losses by increasing the price for consumers.

According to the details, in order to achieve the tax collection target set for the fiscal year the global lender has asked the Pakistani government to increase the prices of gas and electricity for consumers.

If the Pakistani government goes ahead with the move then it would add an extra burden on people already suffering due to the economic fallout of the coronavirus pandemic.

Earlier this month, Prime Minister Imran Khan had rejected a hike in petroleum products for the current month to provide financial relief to the masses amid high food inflation and heavy rains in the country which would incur an Rs17 billion revenue loss to the government

The IMF also asked the government to allow the National Electric Power Regulatory Authority (Nepra) and Oil and Gas Regulatory Authority (Ogra) to decide the prices of the essential products.

The global lender also urged the government to implement economic and tax reforms and emphasized that the tax collection target for the first quarter (July-September) of the ongoing fiscal year must also be achieved.

International Trade Facilitator asked Pakistan to collect over Rs1,000 billion in the form of taxes during the said period.

Last year, the global lender had approved a $ 6billion bailout package for Pakistan under the Extended Fund Facility (EFF) after the country agreed to enforce a flexible exchange rate, enhance taxes, and end circular debt.