Govt To Impose Rs170bn In Taxes Through Mini-Budget

Govt To Impose Rs170bn In Taxes Through Mini-Budget
Soon after the culmination of parleys with the International Monetary Fund (IMF) mission, Finance Minister Ishaq Dar on Friday announced that the government will have to impose Rs170 billion in taxes through a mini-budget ahead of the IMF deal.

While talking to journalists, Dar confirmed that the government had received the draft of the Memorandum of Economic and Financial Policies (MEFP) from the IMF.

The finance minister highlighted that the IMF programme that the government was executing was the one inked by former premier Imran Khan with the IMF in 2019-2020. He mentioned that the PML-N-led government is holding talks on this agreement as a "sovereign commitment".

While talking about parleys with the IMF mission, the policy-making regarding the power, and gas sectors and the fiscal and monetary side came under discussion. He informed journalists that talks were attended by the State Bank of Pakistan (SBP) governor and officials from different departments and ministries.

Dar rebuffed the rumors of imposition of the Rs700-800 billion tax and announced that taxation measures of Rs170 billion in a mini-budget will be taken.

Dar said the government will implement reforms in the energy sector. He added that the government will bring the circular debt in the gas sector to zero and untargeted subsidies will be minimized.

While announcing that the government will have to impose Rs170 billion in taxes through a mini-budget, the finance minister stressed that some of the reforms suggested by the IMF are in the favor of the country. “Reforms are needed in Pakistan and we have assured the IMF of its implementation,” he said.

He shared that the government has received the MEFP draft and a virtual meeting with the IMF will be held on Monday.

While talking about the flaws in the power sector, the finance minister said that the cost of electricity generation is Rs3,000 but its recovery is just Rs1,800 billion.

He said that the government is aware of rising inflation and it has decided to increase the budget of the Benazir Income Support Program (BISP) by Rs40 to Rs400 billion to provide relief to the most vulnerable segments of society.

He further said that the government has refused to impose sales tax on petroleum products and the IMF accepted it. He added that the general sales taxes will be added to the Rs170 billion.