Finance Minister Ishaq Dar has said that all pre-conditions for Staff Level Agreement (SLA) between Pakistan and IMF have been implemented. However, there is still complete silence in ranks of World Financial Institution. There is no statement from IMF officials regarding whether agreement will reach its completion or not, while the current agreement is only three days away.
Prime Minister Shehbaz Sharif said in a conversation that we have fulfilled all the conditions of the IMF, and now the financial institution has no justification for not signing the agreement.
Accepting IMF’s stringent conditions, Finance Minister Ishaq Dar has introduced three slabs for super tax. A maximum supertax of 10 percent will be levied on the corporate sector.
Fertilizers and petroleum products
To please the IMF, the Finance Minister has increased the 5% levy on fertilizer and Rs 10 per liter petroleum development levy on petroleum products. New taxes of 215 billion rupees were imposed on the salaried class while widening the tax net.
Luxury items
Ishaq Dar hikes GST to 25% on luxury goods to finalize IMF deal While there was a need to bring down the general sales tax rate below 10%, nothing was done.
Income tax
To please the IMF, the government has decided to increase the income tax by two and a half percent while also introducing an additional fixed income tax.
According to the Ministry of Finance, the tax has been increased by 2.5% on the annual income of the salaried class above 2.4 lakhs.
The tax on income up to 24 lakh rupees per annum has been increased from 20 to 22.5% and at the same time fixed income tax of 165 thousand rupees will be levied on the income of 24 lakh per annum.
The tax on income up to 36 lakh rupees per annum has been increased from 25% to 27.5% while at the same time, a fixed income tax of 4 lakh 35 thousand rupees will be levied on income up to 36 lakh rupees per annum.
Annual income tax of more than 60 lakhs has been increased from 32.5% to 35% while fixed income tax of 10 lakh 95 thousand rupees will also be levied.
For the business class, the tax on annual income of Rs.6 lakh to Rs.8 lakh has been increased from 5 to 7.5 percent, on annual income of Rs.8 lakh to Rs.12 lakh, the tax has been increased from 12.5 to 15 percent, on the annual income of Rs.12 lakh to Rs.24 lakh, the tax has been increased from 17.5 to 20 percent, while on annual income from Rs.30 lakh to Rs. The tax on income between Rs 100,000 and 4 million has been increased from 27.5 to 30 percent.
Import ban lifted
As a last step, two days ago, on the instructions of the government, the State Bank of Pakistan lifted all restrictions on imports.
In a notification issued by the State Bank, banks have been instructed to provide full support to importers in providing foreign exchange reserves.
By issuing a notification, banks were allowed to provide foreign exchange to release more than 6,000 containers stuck at the ports.
Finance Minister Ishaq Dar
Federal Minister for Finance and Revenue, Senator Ishaq Dar, while delivering the budget wind-up speech in the National Assembly on Saturday, said that due to the lack of external financing, there was a shortfall of 300 billion rupees in the agreement between the IMF and Pakistan. 213 billion rupees in new taxes and 85 billion rupees in deductions will be met. The deal with the IMF will not involve cuts to the development budget or salary increases.
Senator Ishaq Dar said that the federal government has got a limited authority to increase the levy on petroleum products, the government will get the authority to increase the levy on petrol and diesel by Rs 10, the government should increase the levy on petrol and diesel from Rs 50 to Rs 60. will
He said that they are starting pension reforms in the budget, now they cannot give three pensions to one pensioner, now pensioners will get only one pension which is the highest pension they can take, the pensioner’s wife or After the death of the husband, the children will get pension only for 10 years.
Ishaq Dar said that in constant consultation with the IMF, the tax target of the Federal Board of Revenue is being increased by another Rs 215 billion.
Senator Ishaq Dar said that the tax target is being increased from 9200 to 9415 billion rupees, now the share of provinces under NFC is being increased to 5390 billion rupees.
Comment
Commenting on the above-mentioned government measures, economic experts say that the statements of Prime Minister Shahbaz Sharif and Finance Minister Ishaq Dar are in their place, their actions to please the IMF are also in their place, but the IMF So far, no significant progress is being seen regarding the staff level agreement. After the meeting between the Prime Minister and Kristalina Georgieva in France, an attempt was made to give the impression that the agreement would be concluded soon. Pakistan’s actions are being appreciated by the IMF, but nothing is being done practically.