The IMF requests that Pakistan “impose” a levy on monthly pensions.

According to people familiar with the situation, the “new bailout programme” will need pension adjustments. Policy discussions are expected to start tomorrow as Pakistan and IMF negotiations approach their conclusion.

The IMF’s “insisted” tax on monthly pensions over Rs 100,000 is one of the main features of the new loan arrangement.

It is anticipated that the measure to tax affluent retirees will receive the required legislative support.

It’s becoming clear from the negotiations that the “new bailout programme” will require strict economic measures.

Pakistan has no intention of replacing the IMF loan program; it is still committed to it.

Pakistan will need to practice fiscal restraint, reducing spending and deficits, in order to be eligible for the “new bailout programme.”

The general sales tax (GST) in Pakistan was “asked” to be raised to 18% by the IMF mission last week.

During four rounds of negotiations with Pakistani authorities, the IMF made this demand for a new loan.

The IMF delegation noted that Pakistan’s sales tax collection system is having issues since the provinces are collecting sales tax on services while the center is collecting sales tax on commodities.

They recommended that only the federal government should be in charge of collecting sales taxes. According to the sources, the foreign lender also insisted that the GST exemption be lifted to 18% on the goods and services.

The IMF team also required Pakistan to create a separate regulatory agency and implement reforms in the insurance sector during the fourth round of negotiations. Additionally, the fund called for the sale of three state-owned insurance firms.

The reason the International Monetary Fund (IMF) delegation is in Pakistan right now is that Islamabad wants to participate in another program from the global lender to help with the funding shortfall.

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