IMF urges Pakistan to raise GST to 18% for economic stability

Business May, 16 2024
IMF urges Pakistan to raise GST to 18% for economic stability
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ISLAMABAD: International Monetary Fund (IMF) mission has ‘asked’ Pakistani authorities to increase general sales tax (GST) to 18 per cent.  The demand was put forward by the IMF during four round of talks with Pakistan authorities for a fresh loan.

IMF mission observed that the Pakistan’s sales tax collection system is facing problems as the centre is collecting sales tax on the commodieis, 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 IMF 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 (IMF) delegation is currently in Pakistan as Islamabad is interested in taking another programme from the international lender to address the finance shortage.

On Tuesday, Prime Minister Shehbaz Sharif announced to privatise all state-owned enterprises except for strategically important entities.

Chairing a review meeting on matters related to the Ministry of Privatization and Privatization Commission in Islamabad, the prime minister said apart from strategic state-owned enterprises, all other enterprises, whether profitable or loss-making, will be privatised.

 

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