The International Monetary Fund (IMF) has reportedly suggested that the Pakistani government impose taxes on stationery items, including books, pens, and other essentials.
Sources within the finance department said that the IMF has advised the government to eliminate tax exemptions on various stationery items such as books, pens, paper, sticky notes, cardboard, and more.
It’s reported that officials from the Federal Board of Revenue (FBR) will brief the prime minister on the budget proposals for the fiscal year 2024-25 tomorrow.
As per the proposed budget for FY2024-25, Pakistan is expected to phase out exemptions on sales and income taxes gradually.
Furthermore, the government is contemplating levying sales tax on tractors and pesticides, potentially leading to increased prices for these essential agricultural inputs.
Under the current regulations outlined in the Sixth Schedule of the Sales Tax Act, pesticides and their active ingredients registered by the Department of Plant Protection enjoy exemption from sales tax.
Earlier this week, the IMF released an official statement following discussions with Pakistan, confirming Islamabad’s formal request for a new loan program from the IMF.
Led by Mission Chief Nathan Porter, the IMF delegation engaged in extensive negotiations with Pakistani officials from May 13 to May 23 to assess the country’s economic progress.
The statement commended the Pakistani government’s efforts to boost revenue collection and stressed the importance of fair tax practices across all sectors.
The IMF reiterated its commitment to collaborating with Pakistan for sustainable economic growth, noting that the country’s economy would benefit from the Extended Fund Facility (EFF) program.
Pakistan’s successful fulfillment of targets set under the Standby Arrangement Agreement was highlighted, supporting the initiation of the forthcoming new loan program.
In addition to taxation measures, the IMF emphasized the importance of expanding the tax base to ensure economic stability, along with appropriate policy and exchange rate adjustments to tackle inflation.
Addressing energy sector challenges was underscored as a priority, with the IMF advocating for reforms to reduce energy production costs. Furthermore, it suggested a stringent monetary policy until inflation is under control.
The IMF also emphasized the need to enhance the performance of state-owned enterprises, suggesting privatization as a means to improve efficiency.
