The government has agreed to impose Rs215 billion new taxes as part of its last-ditch efforts to revive the stalled International Monetary Fund (IMF) loan programme, Finance Minister Ishaq Dar told the National Assembly on Saturday.
The development came a day after Prime Minister Shehbaz Sharif met IMF Managing Director Kristalina Georgieva in Paris, on the sidelines of the Global Financing Summit.
Addressing the lower house of the parliament session, the financial czar said, “Pakistan and the IMF had detailed talks as a last effort to complete the pending review.”
During the negotiation, the government has agreed to introduce a number of changes to its budget for the fiscal year 2024, he added.
Dar said that they would collect a further Rs215 billion in new tax and cut Rs85 billion in spending. He added that they would take a number of steps to shrink the budget for the fiscal year starting from July.
Giving further details, the federal minister said: “Pakistan has agreed on Rs215 billion taxes after three-day parleys with the officials of the IMF to complete the 9th review under the EFF, pending due to the country’s external financing gap.”
“As a result of the talks with the IMF, for the fiscal year 2023-24, the final taxes of only Rs215 have been agreed, ensuring that it will not burden the poor and middle segments of the society,” he said while winding up general discussion on the budget for the year 2023-24.
Pakistan, he further said, would bring down the running expenditure by Rs 85 billion, which would have no impact on the proposed development budget, the raise in salaries and pensions of the federal government employees.
He said the government held talks with the Washington-based lender with complete sincerity and assured the parliament that once the things with the international lender were settled; all details would be made public by placing the agreement on the official website of the Ministry of Finance.
Resultantly, he said the proposed tax collection target of the Federal Board of Revenue (FBR) had been increased from Rs9.2 trillion to Rs9.415tr, with the provincial share going up from Rs5.276tr to Rs5.390tr, the federal government total expenditure estimate from Rs14.460tr to Rs14.480tr and pension estimate from Rs761 billion to Rs801bn.
Similarly, he said the subsidy estimate would be at Rs1.064tr and grants at Rs1.405tr, adding as a result of all these measures, the overall budget deficit would come down with a cushion of Rs300bn [Rs215 billion taxes and Rs85 billion reduction in running expenditures].
— Additional input from APP
