imf: Pak cabinet OKs supplementary budget to win funds from IMF
ISLAMABAD: Pakistan‘s cabinet on Thursday approved a supplementary budget that plans to end exemptions on sales tax and levy new duties as part of fiscal tightening measures aimed at winning funding from the International Monetary Fund.
The IMF approval is also a pivotal endorsement for Pakistan’s economy, which is struggling with external and current account deficits, a depreciating currency, struggling foreign reserves and rising inflation. The IMF agreed last month to revive a stalled $6 billion funding programme, but demanded further budgetary tightening and central bank autonomy from Pakistan before the next tranche could be approved.
The IMF board meets on Jan 12 to approve the tranche. PM Imran Khan’s government will need its allies’ support in parliament to win a simple majority to pass the finance bill. The government aims to raise billions of rupees by withdrawing the sales tax exemptions so that all sectors pay a uniform 17%, levy new duties and revise tax collection target, officials said. reuters
The IMF approval is also a pivotal endorsement for Pakistan’s economy, which is struggling with external and current account deficits, a depreciating currency, struggling foreign reserves and rising inflation. The IMF agreed last month to revive a stalled $6 billion funding programme, but demanded further budgetary tightening and central bank autonomy from Pakistan before the next tranche could be approved.
The IMF board meets on Jan 12 to approve the tranche. PM Imran Khan’s government will need its allies’ support in parliament to win a simple majority to pass the finance bill. The government aims to raise billions of rupees by withdrawing the sales tax exemptions so that all sectors pay a uniform 17%, levy new duties and revise tax collection target, officials said. reuters
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