IMF satisfied with Pakistan’s 2024-25 budget: report

The International Monetary Fund (IMF) has expressed its satisfaction with Pakistan’s budget for the next fiscal year.

Express News reported, quoting sources, that the global lender had recommended eliminating all tax exemptions in the budget, which includes removing exemptions exceeding Rs 3 trillion.

Pakistan is in talks with the IMF for a loan of $6 billion to $8 billion to bolster its foreign exchange reserves and meet other financial obligations. 

Implementation of the new program is expected soon, with a staff-level agreement with the IMF likely to be signed in June or July.

To expand the tax net, the Federal Board of Revenue (FBR) will enhance its enforcement measures, aiming to collect tax revenues exceeding Rs3.8 trillion in the upcoming fiscal year. 

The income tax structure for the salaried class has been aligned with international standards as per IMF’s recommendations. Technology will be used to prevent tax evasion, and energy subsidies will be limited, with consumers charged the full cost of production.

Sources further disclosed that political parties will refrain from politicising the IMF program, and provincial governments will fully implement the new measures. 

On Wednesday, the federal government presented the budget for fiscal year 2025 with a total outlay — the sum of expenditures and net lending of funds — of Rs 18.877 trillion, representing a 30% increase from the previous year’s budget.

The government has proposed Rs 17,203 billion for current expenditure in the FY25 budget, a substantial 29% increase from the previous year. To meet these expenditures, the government has set an ambitious target of over Rs 13 trillion from taxation. 

To increase the non-tax revenue, the government proposed to jack up the Petroleum Development Levy (PDL) by Rs 20 to Rs 80 at maximum capacity. The government is hoping to collect a massive Rs 1.3 trillion through the levy even though it will mean a significant increase in the price of petrol.