The government of Pakistan is steadfastly committed to finishing the International Monetary Fund (IMF) programme and upholding all of its obligations to other nations, according to Senator Ishaq Dar, the country’s finance minister.
The government’s policies to improve fiscal and monetary stability while achieving sustainable economic development through practical policies were supported by the delegation during a meeting with a delegation from M/s Rothschild & Co on February 21 in Islamabad.
Discussions on potential remedies for economic recovery, sustainable growth, and development were prioritized in the face of economic challenges. The Minister expressed appreciation for the visitors’ good intentions for Pakistan’s economic growth and reaffirmed that the government was dedicated to achieving the goals of the IMF programme and upholding all international obligations.
Commitment for IMF package
A mini-budget or Finance (Supplementary) Bill 2023 was approved by the National Assembly, which is a mandatory requirement for applying for the IMF loan tranche of $1.1 billion, demonstrating the government’s commitment to the program. The government is currently holding discussions with the IMF and adhering to its conditions to cushion the country’s dwindling economy.
The new bill raises the sales tax on imported goods, such as automobiles, home appliances, chocolates, and cosmetics, from 17 to 25%. The general sales tax was increased from 17% to 18%, and there are now additional taxes on business-class air travel, wedding venues, cell phones, and sunglasses. Further austerity measures are anticipated to be announced by the prime minister in the upcoming days as “difficult decisions” must be made.
Dr. Aisha Ghaus Pasha, the minister of state for finance, declared that an agreement at the staff level between Pakistan and the IMF was imminent (SLA). Through difficult negotiations, the government was able to convince the IMF to lower their demand for taxes from Rs 875 billion to just Rs 170 billion. A 25 percent increase on luxury items and an increase in the GST rate from 17 to 18 percent have been mandated by the IMF and will take effect immediately.
Overall, the government has demonstrated its commitment to sustainable growth and economic recovery by taking the necessary steps to uphold its international obligations while protecting the nation’s ailing economy.