The International Monetary Fund (IMF) has praised Pakistan’s tough economic measures in the 2024-25 budget, according to a report by Pakistan Talk Show.
Significant progress has been made in the ongoing virtual negotiations between Pakistan and the IMF, with the IMF expressing satisfaction over the economic decisions taken in the budget and acknowledging the positive involvement of political parties.
The IMF has appreciated the limitation of tax exemptions, recognizing it as a step towards improving the economy. The IMF delegation is scheduled to visit Pakistan in the last week of June for discussions regarding a new loan program, as Pakistan has met the prior conditions set by the IMF. Additionally, the IMF expects the budget to be approved by June 28 or 29.
Finance Minister Muhammad Aurangzeb presented the budget for the fiscal year 2024-25, totaling over Rs18 trillion, amidst protests from opposition lawmakers belonging to the Pakistan Tehreek-e-Insaf (PTI)-backed Sunni Ittehad Council. The federal government proposed the abolition of sales tax exemptions and concessions on items such as mobile phones, copper, coal, paper, and plastic scrap. The budget speech included a proposal for a standard sales tax rate of 18 percent on various items.
The budget also suggested increasing import duties on luxury cars worth over $50,000 and on steel and paper products. These measures align with the IMF’s demands for higher tax collection from provinces, imposition of taxes on agriculture and stationery items, monthly pensions, and an increase in gas and electricity prices, along with raising the general sales tax to 18 percent.