IMF Declines Pakistan’s Request to Remove GST on Electricity Bills

During the ongoing economic review talks between Pakistan and the International Monetary Fund (IMF), the global lender has rejected the proposal to waive General Sales Tax (GST) on electricity bills to provide relief to consumers. The IMF has also declined the government’s request to extend the winter relief package for the industrial and agricultural sectors for the entire fiscal year, sources told ProPakistani. Sources revealed that the government is considering providing tax relief to sectors such as real estate, property, beverages, and tobacco. With IMF approval, the tax burden on these sectors is expected to be reduced. Additionally, the government is planning to ease the tax burden on salaried individuals in the upcoming budget. The government has outlined a plan to collect Rs. 250 billion in taxes from various sectors, including retail. This will be achieved through trader-friendly schemes, compliance risk management, and other administrative measures. However, all proposed measures will require final approval from the IMF. Discussions with the IMF have also focused on reducing the circular debt in the energy sector. Officials briefed the IMF that the government has finalized an agreement to borrow Rs. 1.25 trillion from commercial banks at an interest rate of 10.8% to address the circular debt crisis. This borrowing is part of the government’s broader strategy to manage the growing financial challenges in the power sector.