President Alvi Approves Finance Legislation to Advance IMF Agreement
Pakistan hopes to reach a staff-level deal with the IMF within the next week after completing all significant earlier activities.
The Finance (Supplementary) Bill, 2023, often known as the mini-budget, was signed by President Dr Arif Alvi on Thursday as the government hurried to meet IMF requirements to release the economic rescue that the nation needs to avert the risk of default.
Two days after the National Assembly passed the measure, the Prime Minister Secretariat delivered it to the President Secretariat on Wednesday night for approval.
The media wing of the White House issued a statement today stating that “the president approved the bill under Article 75 of the Constitution.”
The financial bill, which the Constitution considers to be a money measure, cannot be rejected or objected to by the president under Article 75(1).
When a bill is presented to the president for assent, according to the article, “the president shall, within [ten] days,-(a) assent to the bill; or (b) in the case of a bill other than a money bill, return the bill to the Majlis-e-Shoora (Parliament) with a message requesting that the bill or any specified provision thereof, be reconsidered and that any amendment specified in the message be considered.”
Pakistan is aiming for a staff-level deal with the IMF within the next week after completing all significant earlier activities, which will also open the door for eagerly anticipated credit transfers from other multilateral as well as bilateral lenders.
Dawn had previously been informed by a reliable source that Pakistan and the IMF would sign the staff-level deal on February 28. The IMF executive board meeting, which is anticipated to take place in the first week of March, will come next, the source claims.
The government was required by the IMF to increase tax income by an additional Rs 170 billion. By Statutory Regulatory Regulations, the majority of the tax measures totalling Rs. 115 billion have already been put into effect as of February 14. (SROs). The remaining Rs55 billion in tax changes will now take effect following the president’s formal approval.
In 33 categories of goods spanning 860 tariff lines, comprising high-end mobile phones, foreign foods, decorative items, as well as other luxury products, the bill had suggested raising the GST from 17 to 25 per cent.
The excise charge on cement has been hiked from Rs1.5 to Rs2 per kilogramme through the budget bill, a move that is expected to bring in an additional Rs6 billion.
To generate an additional Rs10 billion for the government, the road tax on fizzy drinks was hiked from 13 to 20 per cent.
To generate an additional tax of Rs4 billion, a new excise tax of 10% was suggested on non-aerated beverages such juices, such as mango and orange.
The government would receive an additional Rs10bn in tax revenue from the rise in excise taxes on business, first, and club class airline tickets.
As its economic situation worsens, Pakistan is in desperate need of money. Its foreign exchange reserves, which are now only $3 billion, are only enough to last three weeks of restricted imports. In addition to releasing a $1.2 billion bailout, an arrangement with the IMF would open up additional finance options for Pakistan.
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