Tax exemption removal pacifies IMF

Government is expected to reach a staff- level agreement with the IMF in the ongoing month.


Our Correspondent June 14, 2024
Details reveal that a new law is being introduced through the Finance Bill, amending the Income Tax Ordinance, to enforce this measure. Photo: AFP/FILE

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ISLAMABAD:

The IMF has expressed its satisfaction over Pakistan’s proposed budget for the next financial year as it incorporated its demand of removing all tax exemptions worth nearly Rs3.8 trillion.

According to sources, the FBR enforcement has been increased to expand the tax net.

Now that the government has met the IMF’s demand, the chances of the Washington-based lender approving a fresh bailout programme for the country have considerably brightened.

The government is expected to reach a staff- level agreement with the IMF in the ongoing month.

In accordance with the IMF’s condition, the income tax on the salaried class has been raised at par with international level.

The sources said as per the global lender’s demand, technology would be used to stop tax evasion.

They added that by limiting power subsidies, consumers would be charged the full cost of production.

In the coming financial year, the state-run power companies will be privatised, deregulating the power sector.

The process of the government-run companies’ privatisation will be accelerated.

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