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IMF Rejects Proposal to Abolish GST on Electricity Bills
Pakistan's proposal to abolish GST on electricity bills was rejected by the IMF in ongoing economic review talks. Relief measures for real estate, property, and salaried class under discussion.
ND
by News Desk
2025-03-07
IMF Rejects Proposal to Abolish GST on Electricity Bills

The International Monetary Fund (IMF) has rejected Pakistan's proposal to abolish General Sales Tax (GST) on electricity bills in a bid to provide relief to consumers. The decision came during the ongoing economic review talks between Pakistan and the IMF.

No Extension for Winter Relief Package

According to sources, the IMF also refused to allow the extension of the winter relief package for industrial and agricultural sectors for the entire fiscal year. The discussion focused on reducing circular debt in the energy sector, a key concern in Pakistan’s economic policies.

Relief Measures Under Consideration

Despite the IMF’s rejection of GST abolition on electricity, the government is considering tax relief measures for sectors such as real estate, property, beverages, and tobacco. Additionally, proposals to reduce the tax burden on the salaried class in the next budget are under discussion.

The government plans to raise Rs 250 billion in taxes from various sectors, including retail, through administrative measures such as the Trader-Friendly Scheme and Compliance Risk Management.

Circular Debt and Loan Agreement

To address the growing circular debt, Pakistan has informed the IMF that it will borrow Rs 1,250 billion from commercial banks at an interest rate of 10.8%. An agreement has already been reached on this borrowing plan.

The final approval of all taxation and relief measures will be subject to IMF approval, as Pakistan navigates strict economic reforms under its ongoing IMF program.
Tagged:

IMF

TaxReforms

PakistanEconomy

GST

ElectricityPrices
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