The International Monetary Fund (IMF) mission has urged Pakistani authorities to increase the general sales tax (GST) to 18 percent. This request was made during four rounds of discussions with Pakistani officials regarding a new loan.
The IMF mission highlighted challenges in Pakistan's sales tax collection system, noting that sales tax is currently collected by both the federal government on commodities and the provinces on services. They proposed that sales tax collection should be solely managed by the federal government. Additionally, the IMF recommended ending GST exemptions and raising the tax to 18 percent on both commodities and services.
In the fourth round of talks, the IMF also called for reforms in the insurance sector and the establishment of a separate regulatory body. They further demanded the privatization of three government-owned insurance companies.
The IMF delegation's visit to Pakistan comes as Islamabad seeks another program from the international lender to address financial shortages.
Prime Minister Shehbaz Sharif announced plans to privatize all state-owned enterprises except for strategically important entities during a review meeting in Islamabad. He emphasized that all other enterprises, whether profitable or facing losses, would be subject to privatization.
