Pak: International Monetary Fund proposes reviving 18 pc tax on petrol amid bailout talks
Islamabad: The International Monetary Fund (IMF) has recommended reinstating an 18 per cent general sales tax (GST) on petrol during the ongoing discussions with the government for the release of the last tranche of its bailout package, The Express Tribune reported on Saturday.
The IMF has proposed increasing the levy on petrol by Pakistani currency (PKR) 60 and reinstating the 18 per cent GST previously abolished in March 2022.
The amount of federal excise duty on petroleum products in the fiscal year 2023 was 0.7 per cent of the GDP, while for other items, it was 0.4 per cent of the GDP, mainly obtained from the federal excise duty on cigarettes.
The Petroleum Development Levy has undergone several changes in recent years, but there was a significant increase in it in fiscal year 2023.
It has been proposed to gradually increase excise duty on luxury items produced in the country, such as yachts, while enhancing border control. This is aimed at preventing the illegal supply of petroleum byproducts from sensitive areas in particular.
According to reports, an increase in federal excise duty (FED) at a uniform rate on domestically manufactured cigarettes has been recommended by the IMF. There is also a proposal to apply the same tax rate to imported cigarettes as local cigarettes.
Pakistan Prime Minister Shehbaz Sharif said on Thursday that the financially beleaguered nation needed another long-term bailout from the International Monetary Fund (IMF) to stabilise its fragile economy, ARY News reported.
“A new tranche of loan is likely to be received from the IMF in a few days, however, we would need another programme,” he said while addressing the session of the Special Investment Facilitation Council (SIFC) apex committee attended by civil-military leadership.
The comments came a day after the IMF agreed to a staff-level agreement with Islamabad which, if approved by its board, would disburse the last tranche of USD 1.1 billion under an existing USD 3 billion standby arrangement.
He said that the International Monetary Fund (IMF) concluded the review for issuance of the last tranche of USD 1.1 billion which hopefully be received by next month.
“We will succeed gradually in breaking the begging bowl and coming out of the debt trap with the reforms,” PM Sharif said.
He also sought the support of all political parties and the provincial governments to successfully implement the agenda of macroeconomic stability in the country, ARY News reported.
Notably, the IMF mission that visited Islamabad for five days on the last review of the stand-by programme said Pakistani authorities expressed interest in yet another bailout.
The stand-by arrangement expires on April 11. (ANI)
Also Watch: