Pakistan shares draft mini-budget with IMF in bid to help resume stalled loan program

ISLAMABAD: Pakistan has shared a draft of a mini-budget worth Rs200 billion with the International Monetary Fund (IMF) to convince for resuming the stalled loan program.

Sources in the Finance Ministry told the scribe that the virtual meeting between the officials of the Finance Ministry and IMF was also held on Wednesday. Pakistani authorities have presented a comprehensive plan on proposed tax measures for the rest of the current fiscal year, sources added.

Sources further said that the Federal government led by Prime Minister Shehbaz Sharif has devised a plan to collect additional Rs200 through tax measures to convince the IMF to resume the stalled loan program.

The authorities have shared the plan and informed that the government will likely introduce a mini budget through ordinance during the next few days adding that sources said that the government was considering implementing the mini budget from February 1, 2023. They further added that the government is all set to promulgate a Presidential Ordinance to impose taxes to the tune of Rs200 billion.

The IMF team was also informed by the Pakistani authorities that the government has planned to collect Rs100 through introducing the Flood Levy during the remaining period of the current fiscal year.

The government is likely to impose additional duties on several luxury goods. The government was also considering withdrawing the tax exemptions granted on goods worth Rs70 billion.

It has been proposed to impose a ‘flood levy’ on banking transactions of non-filers. Meanwhile, it was also proposed to impose ‘withholding tax’ on bank transactions exceeding Rs.50,000 per day.

However, sources added, the proposed tax will not be applicable to individuals included in the Active Taxpayers List. The government estimated Rs.50 billion from withholding tax on non-filers, they said.

The sources said that the Pakistani authorities have also shared a plan to introduce sales tax and full petroleum levy on petroleum products under the agreed plan in June 2022. These tax measures will be taken after formal approval of Prime Minister Shehbaz Sharif, sources said.

Sources said that the IMF will send its team in Pakistani to resume talks after the promulgation of the ordinance.

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