The IMF has requested Pakistan to increase gas prices as part of negotiations for the new loan program. The proposal includes a proposed gas price hike for domestic, fertilizer, CNG, and cement sectors, with potential increases for protected and non-protected consumers. The IMF has also suggested reforms to address circular debt and the tax system.
ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to increase gas prices as part of its negotiations for the new loan program, ARY News reported citing sources.
According to sources, the IMF has proposed a gas price hike for domestic, fertilizer, CNG, and cement sectors from August, with an increase of Rs 100-400 per month for protected and non-protected consumers.
However, the IMF suggests no gas price hike for commercial users, including tandoors.
To reduce circular debt in the gas sector, three plans have been shared with the IMF, and discussions have also taken place on a dividend scheme to achieve this goal, sources added.
Additionally, the IMF has proposed a gas price hike for fertilizer plants.
Sources further added, an agreement has been reached on sharing data on subsidies, reforms, and tariffs with the IMF in a timely manner.
Earlier, the International Monetary Fund mission demanded Pakistani authorities to impose tax on monthly pensions exceeding Rs 100,000.
Prior to this demand, the IMF mission ‘asked’ Pakistani authorities to increase general sales tax (GST) to 18 percent.
IMF mission observed that the Pakistan’s sales tax collection system is facing problems as the centre is collecting sales tax on the commodities, while the provinces on the services.
They suggested sales tax collection should only be done by the federal government. The international lender also demanded to end GST exemption and increase it to 18 per cent on the commodities and service, the sources said.
During the fourth round of talks, the mission also demanded of Pakistan for reforms in the Insurance Sector and formation of a separate regulatory body. The fund also demanded privatisation of three government-owned insurance companies.
The International Monetary Fund delegation is currently in Pakistan as Islamabad is interested in taking another programme from the international lender to address the finance shortage.
The recent call from the International Monetary Fund (IMF) for Pakistan to raise gas prices has sparked a significant debate among policymakers and the public. The IMF has emphasized the urgency of implementing structural reforms to enhance fiscal sustainability and reduce fiscal deficit, urging the Pakistani government to take measures to increase revenue through necessary adjustments in gas prices. The potential impact of such a decision on the economy, particularly on consumers and businesses, has raised concerns. While it is important to consider the IMF’s recommendations, striking a balance between addressing fiscal challenges and ensuring social welfare is crucial. The government’s response to this call and the ensuing policy decisions will have far-reaching implications, requiring careful consideration of both economic and social factors. As the discussion unfolds, it is essential for stakeholders to engage in a constructive dialogue aimed at finding solutions that promote sustainable economic growth while safeguarding the interests of the people.
Source: ARY NEWS
The International Monetary Fund (IMF) has urged Pakistan to raise gas prices as part of loan negotiations, proposing hikes for various sectors from August. To address circular debt, plans and a dividend scheme have been discussed. The IMF also called for tax on pensions exceeding Rs 100,000 and an increase in general sales tax to 18 percent. Reforms in the insurance sector and privatisation of government-owned companies were also demanded, as Pakistan seeks another program to address financial challenges.
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