ISLAMABAD: The International Monetary Fund (IMF) has demanded Pakistani government to end the incentives given to special technology zones and industrial areas in ongoing negotiations.
According to media reports, IMF officials say that Pakistan will have to prepare a comprehensive plan to eliminate all incentives by 2035, which must be completed and submitted by the end of this year. This plan must be prepared under the ongoing agreement with the IMF to ensure fiscal discipline and transparency in revenues.
The Ministry of Finance officials said that for the first time in Pakistan’s history, the budget is being prepared under a staff-level agreement with the IMF, due to which the government will have to achieve all financial targets at all costs. It will not be possible to include any major development project in the upcoming budget and ensure its completion because the government will have to adopt austerity policies due to the budget deficit and financial restrictions. In addition, the International Monetary Fund (IMF) has also demanded stricter measures from the government to increase taxes.
Finance Minister Senator Muhammad Aurangzeb says that the budget is working to provide relief to the salaried class. IMF has suggested that stricter measures be taken against tax defaulters, transparency should be ensured by increasing the use of the powers of tax authorities, and the use of technology should be further increased to prevent tax evasion. Sources from the Ministry of Finance have said that the fine for tax evasion at POS has been proposed to be increased from Rs 5 lakh to five million rupees. There has also been a proposal to register criminal cases along with a fine for tax evasion.
In addition, it has been proposed to abolish all tax exemptions, including solar panels. Similarly, a proposal to impose 18% GST on fertilisers, sprays, and agricultural equipment is being considered.
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