The International Monetary Fund (IMF) has urged Pakistan to apply an 18% General Sales Tax (GST) on petrol and called for comprehensive tax reforms.
This directive includes lifting sales tax exemptions across the board, incorporating petrol and suggesting a Rs 60 levy on petroleum products to enhance tax revenues.
Previously, the IMF had advised an 18% GST on a broader range of goods, such as food, medicine, petroleum, and stationery, aiming to standardize the tax rate across various sectors.
Integrating a wide array of items, including raw food and medical supplies, under a uniform 18% GST could raise revenue equivalent to 1.3% of Pakistan’s GDP, or about Rs1,300 billion.
The IMF and Pakistan have recently agreed at a staff level on the latter’s economic review under the Stand-By Arrangement, with the IMF’s Nathan Porter leading the discussions.
Porter highlighted Pakistan’s economic strides since the initial review, attributing the progress to careful policy execution and renewed financial support from global and bilateral partners.
