Govt assures IMF team of hike in power tariff

ISLAMABAD: As Pakistan teeters on the brink of default and the government continues to make overtures to the International Monetary Fund (IMF) to ensure delayed tranches of a bailout package, the government has confirmed a hike in the power tariff.

Sources said that the economic team has assured the visiting delegation of IMF with regard to an increase of power tariff by Rs 6.79 per unit in next five months.

The power division briefed the IMF team about the plan to reduce the circular debt by increasing electricity prices and preventing power theft and line losses.

The power tariff will increase up to Rs 4.46 per unit in the ongoing month under quarterly adjustment.

Similarly the tariff will hike by Rs 3.21 per unit in February, Rs 69 per unit in March and Rs 1.64 per unit in June respectively.

Sources said that the IMF team on Wednesday also discussed matters with FBR with regard to imposition of taxes.

Sources said that the IMF has asked the Pakistani team to impose ranging between Rs600 to 800 billion taxes besides increasing the annual tax collection target to Rs8300 billion.

Whereas, FBR officials informed that the government is planning to impose Rs 200 billion taxes and the department will meet the current year target of Rs 7470 billion.

Sources said that IMF also demanded withdrawing sales tax concessions in phased out manner given to different sectors while they also asked to impose  sales tax on petrol upto 17%.

It is pertinent to mention that the government has not collected any sales tax on petroleum products for the last 11 months.

Earlier, Pakistan and the IMF have begun talks on a ninth review of the $7 billion Extended Fund Facility (EFF).

The IMF shared lists of prerequisite actions and told Pakistani authorities in plain words that Islamabad will have to move towards implementing all demands for reviving the stalled Fund programme.

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