Government withdraws income tax exemption of Rs 140 billion

Published on March 19, 2021 4:38 p.m.

The federal cabinet has approved summary release of the order.

ISLAMABAD (Dunya News) – Fulfilling another International Monetary Fund (IMF) condition, the Pakistani government Tehreek-e-Insaf (PTI) on Friday decided to scrap the Rs 140 billion income tax exemption.

The government has decided to remove 140 billion income tax exemptions for which a presidential order has also been approved.

The federal cabinet has approved summary release of the order.

According to sources, the procedure for filing the Presidential Ordinance was completed while the bill was not passed by Parliament due to lack of time.

IMF to resume stalled lending program

In February, the IMF and Pakistan announced the resumption of a stalled $6 billion lending program, raising hopes that the South Asian country will return to global bond markets as it is working to revive its Covid-hit economy.

The international lender said a newly agreed package of measures under a three-year loan signed in 2019 aimed to “ensure debt sustainability and advance structural reforms”.

The deal was expected in October last year but was delayed, Pakistani officials say, mainly due to Prime Minister Imran Khan’s refusal to agree to belt-tightening measures at the height of the coronavirus pandemic. .

Pakistan received $1.4 billion from the IMF in April 2020 to help it respond to the pandemic. The fund said on Tuesday that its support had helped the government adopt health containment measures and put in place a temporary fiscal stimulus, a broad expansion of the social safety net, monetary policy support and targeted financial initiatives.

The Asian Development Bank (ADB) said it expects Pakistan’s economy to grow 2% this year after contracting in 2020.

After Tuesday’s announcement, a senior government official told the Financial Times that Pakistan had already raised the price of domestic energy, one of the conditions agreed with the IMF.

Other measures should include increasing tax revenue in the next fiscal year from July to June, he said.