The National Assembly unanimously approved the government’s Finance (Supplementary) Bill 2023 or ‘mini-budget’ in order to avail $1.1 billion tranche of the International Monetary Fund (IMF) loan.
The NA passed the Finance (Supplementary) Bill 2023, proposing additional taxes and duties of Rs170 billion to meet the IMF conditions for the revival of the Extended Fund Facility (EFF).
Under the finance supplementary bill, the government decided to increase the General Sales Tax (GST) from 17 percent to 18 percent. People will also have to pay more for business-class air travel, wedding halls, mobile phones, and sunglasses. It has been decided to hike the GST on luxury items from 17 percent to 25 percent.
Moreover, a 10 percent withholding adjustable advance tax will be levied on the bills of wedding halls in order to promote simplicity and austerity. The FED will be enhanced on sugary and aerated drinks and it will also be increased on cement from Rs1.5 to Rs2 per kg.
Last week Federal Finance Minister Ishaq Dar introduced the Finance Bill (Supplementary) the “mini-budget” in the National Assembly in order to meet IMF Conditions for the approval of the loan program needed to avoid a default.
While addressing the Parliament, the finance minister compared the performance of the previous PML-N and PTI governments.
The finance minister also announces to increase General Sales Tax GST rate from 17 to 18% and increasing the Federal Excise Duty (FED) on cigarettes and Tobacco in order to fetch an additional Rs115 billion out of Rs170 billion agreed to by Pakistan in line with the IMF conditions.
- Govt has increased GST on luxury items from 17% to 25%
- Increase in federal excise duty on cigarettes and fizzy drinks.
- Increase in federal excise duty on cement
- GST has been increased from 17pc to 18pc
- Benazir Income Support Programme (BISP) handouts increased to Rs400bn from Rs360bn
- FDE on business and first-class air tickets to now be Rs20,000 or 50% — whichever is higher
- GST is to not be imposed on essential goods.
Credible Sources at the Ministry of Finance told that they expect the bill to be ascended by Thursday morning, which will pave the way not only for the IMF monies but funds from multi-laterals and bilateral.
According to the latest details, A session of the Senate has also been summoned to move the bill to the upper house. After the passage of the finance bill from both houses, the bill will be then sent to President Arif Alvi for approval.
IMF Virtual Talks
Virtual talks between the International Monetary Fund (IMF) and Pakistan for the completion of the ninth review of the $7 billion loan program began a day earlier before presenting Finance Bill.
The officials of the finance ministry would brief the IMF about the implementation of the conditions set by them for the revival of the loan program. it was reported that the International Monetary Fund (IMF) and Pakistan moved closer to the revival of the $7 billion Extended Fund Facility (EFF) as the IMF responded to the Memorandum of Economic and Financial Policies (MEFP) draft and soon the revival of $7 billion Extended Fund Facility (EFF) will be completed.