Govt to withdraw income tax exemption of Rs 140 billion
The federal cabinet has approved to bring the ordinance through summary circulation.
ISLAMABAD (Dunya News) – Fulfilling yet another condition of the International Monetary Fund (IMF), Pakistan Tehreek-e-Insaf (PTI) government on Friday decided to abolish income tax exemption of Rs 140 billion.
The government has decided to abolish 140 billion income tax exemptions for which a presidential ordinance has also been approved.
The federal cabinet has approved to bring the ordinance through summary circulation.
According to sources, the procedure for bringing the Presidential Ordinance has been completed while the bill was not passed by the Parliament due to lack of time.
IMF to resume stalled loan programme
In February, the IMF and Pakistan had announced the resumption of a stalled $6bn loan programme, raising expectations that the south Asian country will return to global bond markets as it struggles to revive its Covid-hit economy.
The international lender said that a newly agreed package of measures under a three-year loan signed in 2019 sought to “ensure debt sustainability and advance structural reforms”.
The agreement had been expected in October last year but was delayed, according to Pakistani officials, mainly over prime minister Imran Khan’s refusal to accept belt tightening measures at the peak of the coronavirus pandemic.
Pakistan received $1.4bn from the IMF in April 2020 to help it respond to the pandemic. The fund said on Tuesday that its support helped the government to enact health containment measures and deliver a temporary fiscal stimulus, a large expansion of the social safety net, monetary policy support and targeted financial initiatives.
The Asian Development Bank (ADB) has said it expects Pakistan’s economy to grow 2 per cent this year after a contraction 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 were likely to include raising more tax revenue in the next July-June financial year, he said.
