ISLAMABAD: The International Monetary Fund (IMF) has requested Pakistan to raise gas prices as part of negotiations for a new loan program, according to Presstonight, citing sources.
Sources indicate that the IMF has suggested increasing gas prices for domestic consumers, as well as for sectors such as fertilizer, CNG, and cement, starting in August. The proposed increase ranges from Rs 100-400 per month for both protected and non-protected consumers. However, commercial users, including tandoors, would be exempt from this price hike. To address the circular debt in the gas sector, three different plans have been discussed with the IMF, along with a dividend scheme aimed at achieving this goal.
The IMF has also recommended a gas price increase for fertilizer plants.
Additionally, sources mention that there has been an agreement to share data on subsidies, reforms, and tariffs with the IMF in a timely manner. Previously, the IMF mission had suggested that Pakistani authorities impose a tax on monthly pensions exceeding Rs 100,000.
Earlier demands from the IMF mission included raising the general sales tax (GST) to 18 percent. The IMF observed that Pakistan’s sales tax collection system faces issues, with the federal government collecting sales tax on goods and the provinces on services. They suggested that the sales tax collection should be centralized under the federal government. The IMF also recommended ending GST exemptions and increasing the GST to 18 percent on both goods and services.
During the fourth round of talks, the IMF mission also called for reforms in the insurance sector and the establishment of a separate regulatory body. Additionally, the IMF demanded the privatization of three government-owned insurance companies.
The IMF delegation is currently in Pakistan as the country seeks another loan program from the international lender to address its financial shortfall.
