Sources say the IMF will negotiate terms after the budget is approved.

Sources say the IMF will negotiate terms after the budget is approved.

Sources say the IMF will negotiate terms after the budget is approved.
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  • Pakistan has asked the IMF to change the size of the programme from $6 billion to $8 billion.
  • An 11 percent sales tax on petroleum products will be implemented beginning July 1, 2022.
  • Furthermore, a levy of Rs 50 per litre on petroleum goods has been decided.
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The talks between Pakistani authorities and IMF personnel will now restart following the ratification of the budget for the upcoming fiscal year 2022–23, during which the two parties will reach an agreement for a loan facility.

Last week, the Fund said that talks between Pakistan and the IMF had made a lot of progress.

According to Ministry of Finance sources, the talks will restart on June 28 and Finance Minister Miftah Ismail and the governor of the State Bank of Pakistan will sign the contract on Pakistan’s behalf.

Read More: AJK govt presents over Rs163 bn budget for FY2022-23

Sources say that Pakistan has asked the IMF to change the size of the programme from $6 billion to $8 billion and has asked for a one-year extension so that the programme will last until 2024.

According to them, the budget for the next fiscal year will exceed Rs 10,000 billion, and an 11 percent sales tax on petroleum products will be implemented beginning July 1, 2022. Furthermore, a levy of Rs 50 per litre on petroleum goods has been decided.

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Pakistan has agreed to levy Rs5 per litre on petroleum products, increase the tax collection target from Rs7,005 billion to Rs7,450 billion, and increase the customs collection target from Rs950 billion to Rs1,005 billion, and increase the General Sales Tax (GST) collection target from Rs3,008 billion to Rs3,300 billion. Furthermore, the income tax collection target has been set at Rs 55 billion.

The policy framework will be handed over to Pakistan in the next two days, sources added.

Read More: Progressive budgetary measures taken to reduce deficits, ensure sovereignty: Miftah

No more subsidies and the petroleum levy will rise to Rs 50: finance minister

Miftah announced on Friday that the government will no longer provide subsidies for petroleum goods and that the tariff on the item will be increased to Rs 50.

During an interview, “Naya Pakistan,” the minister stated that the previous government put Pakistan on the verge of default and should not have provided subsidies on fuel and energy.

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“During the previous government’s tenure, Rs1,500 were spent on subsidies,” the finance minister said.
The price of petrol is already at a record high after the federal government decided to hike the rate of the commodity by Rs24.03, taking it to Rs 233.89 per litre.
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