1pc increase in GST, imposing GST on oil products, speedy privatisation proposed n US
dollar reaches record Rs283 as foreign exchange reserves tumble to $3.086b n FBR notifies bureaucrats and their families' assets declaration mandatory. ISLAMABAD The International Monetary Fund (IMF) has suggested more tough economic decisions for Pakistan to revive the much needed loan programme by increasing standard rate of General Sales Tax by one percent to 18 percent, imposing GST on oil products and expedite the process of privatization. The four-day technical-level talks between Pakistan and IMF concluded here on Friday. The policy level talks would continue now till February 9 to finalise a memorandum of economic and financial policies (MEFP). The IMF had set tough economic decisions for Pakistan to revive its bailout package to avert the default, as the country’s official foreign exchange reserves have tumbled to $3.086 billion.
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An official informed that the IMF has directed for increasing gas and electricity prices to reduce the volume of circular debt, which has gone to Rs4.1 trillion in both power and gas sectors. The government had already presented a plan to the IMF for reducing circular debt. However, the IMF has expressed concerns over the plan, which would now be finalized in next week in the policy level talks. Meanwhile, the Fund has also asked for increasing standard rate of GST by one percent to 18 percent to generate additional revenue in the current fiscal year. The visiting delegation has also recommended for imposing GST on oil products or increasing petroleum levy. He further said the IMF has also asked for expediting the privatization programme by privatization all loss making public sector entities. It has also asked the government to ensure audit of government departments and to shun the corruption culture.
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The government had already accepted some of the IMF’s demands. The government has allowed banks access to asset declarations of civil servants of BS17-22 as a prior condition for the opening of bank accounts as part of good governance and anti-corruption measures. The Federal Board of Revenue (FBR) has notified “Sharing of Declaration of Assets of Civil Servants Rules, 2023” for sharing of information between the FBR and banks about the assets of civil servants in BS 17-22. According to an SRO 80(I)/2023 issued by the FBR, the rules shall apply for sharing of information with banks. These rules shall apply for a limited purpose of sharing of information in respect of civil servants in BS 17-22. On the other hand, local
currency is under severe pressure after the government in last week had decided to end its control on its price in order to fulfil the conditions of the International Monetary Fund (IMF) officials to revive the loan programme. The rupee on Friday plunged to a historic low against the dollar. At the day’s close, the rupee plunged to Rs276.58, according to the State Bank of Pakistan (SBP), after losing Rs5.22 or 1.89% of its value. Meanwhile, the local currency closed at 283 in the open market. The currency has cumulatively slumped by around Rs46 in last few days, compared to last Wednesday’s close of Rs230.89 to a dollar.
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