- IMF wanted agricultural sector to have taxes, says PM Shehbaz.
- He says the Fund wanted a tax on medical equipment in charity hospitals.
- Premier affirms that the increase in oil prices has no relation to the IMF.
LAHORE/ISLAMABAD: Prime Minister Shehbaz Sharif has said that while it was difficult to prepare a budget as per the instructions of the International Monetary Fund (IMF) and the government saved the masses a lot more taxes, News reported on Sunday.
“I had long discussions on every point and the matter was resolved and no more taxes were imposed on agriculture and fertilizers,” said Prime Minister Shehbaz, revealing that the Fund wanted more taxes on agriculture, fertilizers and other areas, including medical equipment, including those destined for charitable organizations. hospitals.
It is worth noting that President Asif Ali Zardari on Sunday gave the green light to the heavily taxed Finance Bill 2024, which will come into effect from July 1, which marks the beginning of the next fiscal year.
The federal government presented the Rs 18,877 trillion tax-laden budget for the fiscal year 2024-25 (FY25) two weeks ago and it was duly approved by the National Assembly on Thursday earlier this week.
The FY2025 budget comes against the backdrop of efforts by the Pakistan Muslim League-Nawaz (PML-N)-led coalition government to meet the prerequisites for an additional — longer and larger — IMF program. setting a high tax revenue target and trying to reduce the fiscal deficit from 7.4% to 5.9%.
Earlier, News The bank said that though the Washington-based lender had agreed to abolish the Goods and Services Tax (GST) on textbooks, restore reimbursements for teachers and researchers, withdraw Federal Excise Duty (FED) on cement and some other technical changes, it has refused to allow the government to restore export earnings under a flat income tax regime as exporters were lobbying hard not to enter into a normal tax regime.
Meanwhile, the Centre has also introduced reforms in the pension system to initiate a gradual reduction in retirement liabilities.
speaking to NewsThe Prime Minister acknowledged that the government was under pressure from the Fund and that if it had accepted all the IMF instructions, there would have been more burden on many sectors, which would have increased the difficulties for the government.
He revealed that the IMF wanted to tax medical equipment, including those destined for charitable hospitals.
“I convinced them in this sense and those taxes were not imposed,” he said.
Noting that the government and the lender reached an agreement on taxes after “long and difficult discussions,” the prime minister reiterated his commitment to strengthening the country's economy and highlighted positive indicators of investment opportunities.
“We will fulfill the dream of a strong economy; there are clear and positive messages of investment in Pakistan from friendly countries,” he said.
Furthermore, Prime Minister Shehbaz also expressed optimism that it would be Pakistan's last deal with the IMF and the budget under it, after which people would get more relief.
Referring to the reduction in inflation from 36% to 11%, the prime minister said he expected it to decline further in the coming months.
In response to a question, he clarified that the issue of rising oil prices and tax increases was not related to the IMF, but to the current government.
His comments came after the government increased tax on petrol and diesel from Rs 60 per liter to Rs 70 per litre.
Additionally, a tax of Rs 50 per litre would also be imposed on light diesel and kerosene, while a tax of Rs 70 per litre would be levied on high-octane diesel.
In response to a question, the prime minister also lamented the role and “regrettable” reaction of the opposition parties to the National Assembly's resolution in response to the one passed by the US House of Representatives demanding an investigation into the February 8 elections.
“We cannot make concessions” on sovereignty
He said Pakistan is a sovereign and independent country and “this policy of ours is very important to us. We cannot compromise on it.”
His comments refer to US House Resolution 901, in which an overwhelming majority voted to require a “full and independent investigation into allegations of interference or irregularities” at the polls.
HR 901 passed on Tuesday by an overwhelming majority of 368 votes to seven, representing 85% of the total number of US lawmakers in the legislature.
The move prompted a strong response from Islamabad, with the Foreign Ministry saying it “stems from an incomplete understanding of the political situation and electoral process in Pakistan.”
Furthermore, on Friday the Lower House approved a resolution contrary to that of the US Congress, calling it “contrary to the facts” and “interference” in its internal affairs.
Lawmakers from the Sunni Ittehad Council (SIC) backed by Pakistan Tehreek-e-Insaf (PTI) opposed the resolution, chanted slogans of “Encryption-Encryption” and “Shame-Shame” in the House, and tore up copies of the resolution.
Commenting on the Treasury resolution, PTI Chairman Advocate Gohar Ali Khan told reporters outside Parliament today that the government had not properly read the US Congress resolution demanding to ensure human rights and transparent elections.
In his opinion, the resolution passed by the US House of Representatives cannot be described as “foreign intervention.” However, he stated the intention of the incumbent government not to conduct an investigation into the 2024 national elections.
