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Pakistan and the IMF are holding political-level talks on the budget deficit, external financing and other key issues.
Expenditures will be reduced by 600 billion to reduce the budget deficit to an acceptable level, the sources said.
Preparations are being made to cut the development budget by 33 percent, this deduction in the development budget is likely to cross over 300 billion rupees, according to sources.
The development budget expenditure is likely to be over Rs 400 billion out of Rs 727 billion, sources said. Preparations are on the anvil to stop the financing of unnecessary and such projects, which are only on paper, sources say.
“The subsidy will be limited by the budget for the current fiscal year,” the sources said.
The government should increase electricity and gas tariffs to reduce the subsidy, sources say.
The International Monetary Fund (IMF) also requires monitoring of all projects and this monitoring of various projects will be made public on the website step by step, sources added.
The International Monetary Fund (IMF) has asked Pakistan to “do more” to revive the stalled loan program as technical talks concluded in Islamabad.
During the technical talks, the IMF team remained committed to its demand for an increase in the General Sales Tax (GST) from 17 to 18 percent on all goods, with the view that a one percent increase in GDP would help raise another R39 billion. ., sources add.
The IMF also highlighted the Pakistan team for not only scrapping the income tax exemption but also imposing a flood levy to meet the FBR’s revenue target in the current fiscal year 2022-2023.
The fund also asked the Pakistani authorities to increase the flood tax on profits made by banks.
The government team will also give a roadmap for the privatization program during the policy talks, the sources added.
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