IMF expresses satisfaction over budget 2024-25

Recommendations made in budget to end tax exemptions are in line with global lender's suggestions

ISLAMABAD:

The International Monetary Fund (IMF) has expressed satisfaction with the country’s budget for the next fiscal year, Express News reported.

Sources indicate that the IMF had recommended eliminating all tax exemptions in the budget. Proposals include the removal of tax exemptions exceeding Rs3 trillion. To expand the tax net, the Federal Board of Revenue (FBR) will enhance its enforcement measures.

In the upcoming fiscal year, tax revenues exceeding Rs3.8 trillion will be collected. Implementation of the new programme is likely to be decided soon, and the government is expected to sign a staff-level agreement with the IMF in June or July.

The income tax on the salaried class has been aligned with international standards as per IMF's demands. Technology will be utilised to prevent tax evasion as recommended by the global lender. Energy subsidies will be limited, and consumers will be charged the full cost of production.

According to sources, in the upcoming fiscal year, state-owned electricity companies will be privatised, and the power sector will be deregulated. The performance of government companies will be accelerated to match those of government companies in friendly Arab countries.

Sources further disclosed that political parties will not politicise the IMF programme, and provincial governments will fully implement the new programme.

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The country was looking to find ways to increase its revenues to reduce its fiscal deficit as part of reforms being discussed with the IMF.

The country is in talks with the global lender for a loan of $6 billion to $8 billion as it seeks to avert a default for an economy growing at the slowest pace in the region.