Pakistan has promised the IMF to increase the prices of electricity and gas.

Pakistan has promised the IMF to increase the prices of electricity and gas.

The government insists on ending exemptions on income tax, sales tax, duties.

Some significant progress has been reported in the talks between Pakistan and the International Monetary Fund (IMF) for securing the final tranche of $1.1 billion under the standby arrangement.

The two sides are expected to reach a staff-level agreement early next week. Sources in the Ministry of Finance have revealed that Pakistan is committed to timely increase in electricity and gas rates as well as abolishing tax exemptions.

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Sources say that further increase in electricity rates is expected from July 1. Additionally, steps will be taken for monthly, quarterly and annual adjustments to facilitate cost recovery. which are related to income tax, sales tax, and duties. Plans are underway to phase out the current annual tax exemption of Rs 2.239 trillion, with a further commitment to gradually document the economy to boost tax revenue.

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The government has also promised not to issue any new tax exemptions or amnesty schemes in the upcoming budget. However, exemptions for foreign diplomatic missions and non-profit charities will remain.

The IMF has emphasized the importance of protecting beneficiaries under the Beneficiary Income Support Program (BISP), with the government committing to increase the number of beneficiaries by June. Furthermore, the IMF has emphasized the need for continued reforms to maintain economic stability. This includes maintaining a tight monetary policy and following a market-based exchange rate policy.

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Overall, progress in the Economic Review talks indicates a joint effort by Pakistan and the IMF to address key economic challenges and pave the way for sustainable growth and stability in the country's economy.

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On successful completion of negotiations, Pakistan will receive the final installment after the approval of the Executive Board of the IMF.