IMF piles pressure on Pakistan to hike electricity tariff, collect more taxes

Piling up further pressure on Pakistan, the International Monetary Fund (IMF) has asked Pakistan to increase electricity tariff and take more steps to increase income tax, sales tax, and regulatory duties collection and urged the Federal Board of Revenue to take steps in this context.

Per reports, the demand was made during the virtual talks between the IMF officials and Pakistan for the release of $1 billion loan instalment.

“Electricity tariff should be jacked up by Rs1.40 per unit,” the IMF recommended during the talks as it will help Pakistan in controlling the circular debt.

The IMF has asked Pakistan to increase FBR’s yearly collection to Rs63 trillion from Rs58 trillion, the reports added.

It must be noted that virtual talks between Pakistan and the International Monetary Fund are continued from Wednesday in Islamabad. Negotiations, which are underway with the fund for a $1 billion loan instalment, will continue this week.

It is pertinent to mention that a loan agreement worth $6 billion was delayed between the IMF and Pakistan.

On August 24, Pakistan had received $2.75 billion from the International Monetary Fund.

As per the State Bank of Pakistan (SBP), the country had received 2.75 billion US dollars from the IMF as part of the SDR allocation.

After the transfer of $2.75 billion, the country’s foreign exchange reserves have jumped to $27.4 billion.

According to a report, FBR Chairperson Dr Mohammad Ashfaque said that the IMF is satisfied with the collection of the FBR.

He said that the ongoing talks with the IMF have not concluded so far, but the fund staff is satisfied with the collection of the FBR. He added that the FBR exceeded its target by Rs186 billion in the first quarter as the revenue collection stood at Rs1,395 billion in the first three months of the current fiscal year.

The FBR’s annual tax target, he said, would be achieved.

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