- ISLAMABAD: Pakistani taxpayers will face hardest crunch when Prime Minister Yousaf Raza Gilani’s government will impose additional taxes worth 100 billion rupees for the rehabilitation of flood-hit areas and as a part of latest dialogue between the government and the International Monetary Fund (IMF), sources said Tuesday.
The government will also withdraw subsidies on textile and other sectors.
According to sources, ”The government agreed to various conditions laid down by the IMF negotiators during talks with the government. During his speech to the members of South Asia Free Media Association President Asif Ali Zardari had acknowledged, ”Instead of declaring Pakistan a default state we agreed to IMF conditions.”
The IMF had in clear terms asked Pakistan to implement a “reformed General Sales Tax (GST) as a pre-condition to release 6th tranche of $11 billion as an emergency loan to keep Pakistan’s economy intact.
Pakistan badly needs all the financial help it can get, after floods caused nearly $10 billion in losses.
“It was always the case, that the sixth tranche would be based on the case of progress on RGST (Reformed General Sales Tax),” said a government source.
Pakistan said in June it would replace its GST by the RGST by Oct. 1, but that deadline slipped to Dec. 1. Floods of July changed the situation totally in a different way.