In an effort to revive the delayed $6 billion IMF rescue plan, the coalition government is set to raise the price of gasoline goods by a whopping Rs20 per litre starting on September 1.
According to the letter of intent (LoI) the government delivered to the IMF, petroleum items are subject to a sales tax. However, according to the sources, the rate of sales tax will probably increase starting in the following month
The federal government is expected to end the sales tax exemptions on petroleum items for the agriculture sector as of September 1 in order to comply with the IMF’s requirements, the sources continued.
As per the IMF’s requirements, the government is considering imposing a 10.5% sales tax on petroleum items starting in October (IMF).
It is important to note that, in accordance with an IMF agreement, the government already stopped providing subsidies for petroleum items, which led to a spike in inflation.
IMF executive board meeting on August 29
The meeting of the executive board was made possible by the government’s confirmation on August 17 by Finance Minister Miftah Ismail that the letter of intent (LoI) had been returned to the IMF after the necessary conditions had been met.
The paper, which was received on August 12, was submitted to the lender after being signed by the finance minister and acting governor of the State Bank of Pakistan (SBP), Murtaza Syed, according to the finance minister’s interaction with journalists.
The development has prepared the way for Pakistan’s request to approve the seventh and eighth reviews and release a tranche of $1.17 billion under the Extended Fund Facility (EFF) to be discussed at the IMF’s executive board meeting on August 29.