ISLAMABAD:
The International Monetary Fund (IMF) has welcomed the federal government’s strict policy measures proposed in the upcoming federal budget during virtual talks with the government authorities with regard to the next bailout package.
According to official sources, there has been progress in the talks between Pakistan and the IMF. The Fund, they said, has welcomed the tough economic decisions in Pakistan’s federal budget and praised the positive role of political parties. The IMF has also appreciated the limitation of tax exemptions for economic improvement.
An IMF delegation may visit Pakistan in the last week of June to discuss a new loan programme. Pakistan has already implemented prior conditions before the new programme. The budget for the next fiscal year is expected to be approved by June 28 or 29.
Prime Minister Shehbaz Sharif on Friday did not announce a decision on exporters’ demand to withdraw the budget proposal of imposing standard 29% income tax rate–keeping his cards close to the chest as he faces competing demands for reversal of many tax proposals.
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The exporters have pleaded that it would be the height of injustice and inequality for exporters to tax them at such a high rate of 29% along with up to 10% of super tax and also bound them to consider the tax withheld at receipt as minimum.
There are many other taxes and withholding taxes becoming a big hindrance in the way of export growth. They are claiming that the effects of new proposals for the export industry are not rational at any point.
The PML-N-led coalition government has also dropped a price bomb of over Rs250 billion on milk consumers by proposing an 18% general sales tax (GST) on every liter of packaged milk being sold in the country.
Interestingly, the Shehbaz Sharif government has targeted a segment related to people’s nutrition, disregarding the sad fact that Pakistan is already facing a very high stunting rate of 40% in children.
As packaged milk comprises a very small portion of the total milk consumed in Pakistan, the government will reap the benefit of only Rs75 billion, while the remaining Rs250 billion will go into the pockets of milkmen.