ISLAMABAD: The International Monetary Fund (IMF) has urged Pakistan to enforce an 18 percent General Sales Tax (GST) on petrol, sources said.
The IMF has asked Pakistan to eliminate sales tax exemptions on all goods, including petrol. The newly elected government of Pakistan is also advised to impose sales tax on petroleum products and introduce a Rs 60 levy to boost tax revenue.
Previously, the IMF had suggested the Pakistani government impose an 18 percent GST on various essential items such as food, medicine, petroleum products, and stationery. Furthermore, the IMF recommended bringing numerous items under the standard 18% GST rate, including unprocessed food, stationery, medicine, POL products, and others.
The IMF projected that streamlining GST rates could result in a revenue increase of 1.3 percent of Gross Domestic Product (GDP), equivalent to Rs1,300 billion in national revenue.
It's important to note that the IMF and Pakistan have reached a staff-level agreement on the second and final review under Pakistan’s Stand-By Arrangement.
According to an official statement from an IMF team led by Nathan Porter, the IMF has reached a staff-level agreement with Pakistan on the second and final review of the country’s stabilization program supported by the IMF’s US$3 billion (SDR2,250 million) SBA approved.
Porter stated, “Pakistan’s economic and financial situation has improved in the months following the first review, with growth and confidence continuing to recover due to prudent policy management and the resumption of inflows from multilateral and bilateral partners.”
