IMF loan agreement terms reveal massive new taxes to be levied on Pakistanis
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The International Monetary Fund (IMF) has released the Pak loan agreement terms.Under the agreement, the government will not issue a new tax amnesty scheme, tax exemptions or tax incentives while agriculture and construction will be taxed.
According to the pack, expenditure on salaries and pensions will be reduced while expenditure in the energy sector will be limited and subsidies to the energy sector will be gradually reduced.
It added funding for sponsorship programmes like BISP will be increased and the central and provincial governments will increase funds in the welfare sector.
As per the agreement, a monitoring report of government institutions will be issued and the law on better governance in the institutions will be activated.
The difference between the open and interbank rates of the dollar will not exceed 1.25 per cent and in 2024, the electricity price hike notification will be issued.
The IMF hailed the recent policy rate hike as optimistic while Pakistan needs to keep the monetary policy rate tight and Pakistan has to tighten monetary policy.
Pakistan must adjust the exchange rate to the market and the autonomy of the State Bank is essential, the IMF deal underlined, adding that to reduce inflation, monetary policy should be tightened.
During the current financial year, the primary surplus will be kept at RS401b. According to the agreement, restrictions on imports will be lifted. Pakistan has given concrete assurances to increase revenue.
Last week, the IMF approved a 9-month Stand-By Arrangement (SBA) for Pakistan for an amount of about $3 billion days.
Pakistan received $1 billion from the United Arab Emirates (UAE) as part of its financial commitment to help Pakistan secure the IMF bailout package.
