IMF Urges Pakistan to End Tax Exemptions, Impose Rs1,300 Billion Taxation

The International Monetary Fund (IMF) has urged the government of Pakistan to terminate tax exemptions and impose taxes amounting to Rs1,300 billion.

IMF experts have advised the government to raise the general sales tax to a minimum of 18% on various commodities, ranging from essential food items and medicine to petroleum products.

According to IMF estimates, implementing these additional tax measures could result in a revenue gain of up to 1.3% of the GDP.

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The IMF’s team last visited Pakistan in December 2023, engaging in discussions with the caretaker government. However, the new administration is expected to face significant challenges in implementing the IMF’s recommendations.

Pakistan is awaiting the disbursement of the third installment of the stand-by agreement, which was finalized in July of the previous year.

Amidst already high inflation and interest rates, the imposition of additional taxation is poised to further burden the population.