Pakistan rejects IMF demand of Rs700 billion budgetary measures: Tarin

KARACHI: Pakistan has rejected the International Monetary Fund’s (IMF) demand of taking budgetary measures worth Rs700 billion, to avoid putting additional burden on the existing taxpayers, a government official said on Friday.

In his speech at the Senate about the Federal Budget 2021/22, Finance Minister Shaukat Tarin said the Pakistan authorities had informed the IMF that the required revenue would be generated through broadening the tax base.

The IMF had proposed to levy an additional Rs150 billion in direct taxes, which was not accepted, he added.

Highlighting other relief and revenue measures introduced through the Finance Bill, 2021, the finance minister said the government had withdrawn 10 per cent tax on employees and salaried persons’ medical disbursement.
He said there was no tax on flour and value-added products of wheat. Further, no new tax was imposed on the internet services.

“Mobile calls will be taxed at 75 paisas if it lasts above 5 minutes,” he added.

The finance minister also explained during the Senate briefing that the government has expanded the incentives provided to the motor vehicles to 1000cc instead of the proposed 850cc variant.

The government has also provided relief to the Real Estate Investment Trust (REIT) by reducing the tax rate to 15 per cent from the existing 25 per cent. Likewise, the tax on poultry products has also been reduced to 10 per cent from the existing 17 per cent, he said, adding that the property tax has been reduced to 20 per cent from 35 per cent.
Tarin said the warehouses for agricultural products would be constructed to minimise the intervention of middle men, while the sector would get an additional amount of Rs25 billion in FY22.

Continuing his arguments, he said, the government has also lowered the tax rate on textile products from the existing 12 per cent to 10 per cent, while the tax rate on value addition of gold remains at 17 per cent. The tax rate on the purchase of gold and silver would be 1 per cent and 3 per cent, respectively, he said, adding that there would be zero per cent tax on all information technology firms.

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