WEB DESK: The International Monetary Fund (IMF) has proposed that Pakistan elevate its general sales tax (GST) to 18 per cent, as disclosed in recent discussions between the IMF delegation and Pakistani authorities regarding a potential new loan arrangement.
During four extensive rounds of talks, the IMF mission expressed concerns about Pakistan’s current sales tax collection system, where the central government is responsible for tax collection on commodities. To address this, the IMF suggested centralising sales tax collection under the federal government and eliminating GST exemptions.
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Furthermore, the IMF proposed raising the tax rate to 18 per cent on both commodities and services to enhance revenue generation. In the fourth round of talks, the IMF delegation emphasised the need for reforms in the insurance sector, advocating for the creation of a separate regulatory body.
As part of these reforms, the IMF recommended privatising three government-owned insurance companies. The proposal aligns with Pakistan’s efforts to secure another program with the IMF to alleviate financial constraints.
The ongoing dialogue highlights the collaborative efforts between Pakistan and the IMF to tackle economic challenges and explore solutions to strengthen the country’s financial stability.
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