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Pakistan and the IMF are negotiating at the political level on the budget deficit, external financing and other key issues.
Sources said that in order to bring down the budget deficit to an acceptable level, spending will be reduced by 600 billion.
According to sources, preparations are underway for a 33 percent cut in the development budget, which is likely to cross over Rs 300 billion.
Sources shared that the development budget expenditure is likely to be over Rs 400 billion from Rs 727 billion. Sources said preparations are underway to stop financing unnecessary projects and such projects that remain only on paper.
According to the sources, “the subsidy will be limited from the budget of the current financial year”.
Sources say that the government is forced to raise electricity and gas tariffs to reduce this subsidy.
Sources have added that the International Monetary Fund (IMF) also requires monitoring of all projects, and this monitoring of various projects will be published step by step on the website.
The International Monetary Fund (IMF) has asked Pakistan to “do more” to revive its defaulted debt program as technical talks concluded in Islamabad.
During the technical talks, the IMF team stuck to its demand for a 17 to 18 percent increase in the general sales tax (GST) on all goods, so a one percent increase in GST would help raise another Rs 39 billion. . ., the sources added.
The IMF has also stressed on the Pakistani team not only to withdraw income tax exemption but also to impose flood tax to meet FBR’s revenue target this year from 2022-23.
The fund has also demanded that the Pakistani authorities increase the flood tax on bank profits.
Sources added that the government team will also present a road map for the privatization program during the political talks.