Islamabad: The International Monetary Fund (IMF) has proposed that the Pakistan government increase electricity and gas tariffs and impose an 18% General Sales Tax (GST) on petroleum.
Sources indicate that negotiations between Pakistan and the IMF on a new loan program are expected to conclude today. The IMF mission might depart tonight without reaching a staff-level agreement.
Sources also mentioned that Pakistan must fulfill several prior conditions before a staff-level agreement can be reached. After the new budget, there is a possibility of further negotiations with the IMF for a new bailout package.
Additionally, the government is considering imposing a carbon levy instead of GST on petroleum next year. The conditions include the implementation of new taxes, increases in electricity and gas tariffs, and reforms in the energy sector.
It has been revealed that the new fiscal year’s budget must be presented according to the IMF’s conditions. The government is already collecting a petroleum levy of 60 rupees per liter on petroleum products.
Sources estimate that the petroleum levy will generate 1,080 billion rupees in the next fiscal year, with a potential revenue of 2,295 billion rupees from the petroleum levy over the next two years.
It is expected that the revenue from the petroleum levy will reach 1,215 billion rupees the following year.
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