Pakistan National Assembly passes bill to meet IMF demands for USD 1.1 billion loan facility

‘Poor economic policies of the previous Imran Khan-led government responsible for the current financial crisis,’ says Pak FM Ishaq Dar.

Pakistan’s National Assembly on Tuesday, February 21, 2023, unanimously passed a money bill aimed at raising tax revenues to fulfil the demands set by the International Monetary Fund (IMF) for seeking a USD 1.1 billion loan facility to avoid an economic meltdown.

The Finance (Supplementary) Bill 2023 or ‘mini-budget’ was approved in the lower lower house of Parliament days after the International Mone­­tary Fund (IMF) urged the cash-starved country to take strong measures to avoid getting into a "dangerous place" where its debt needs to be restructured.

IMF chief Kristalina Georgieva said in Germany on Friday that Pakistan must take steps to ensure that its high earners pay taxes and only the poor get the subsidies if it wants to function as a country.

The bill increases sales tax from 17 to 25 per cent on luxury items. The general sales tax has been raised from 17 per cent to 18 per cent.

People will also have to pay more for business-class air travel, wedding halls, mobile phones, and sunglasses, Geo News reported.

"The prime minister will also unveil (further) austerity measures in the next few days," Finance Minister Ishaq Dar said as the bill was passed with minor amendments, adding: "We will have to take difficult decisions".

The government introduced the bill last week with the aim to get it passed by the weekend but it could not after it faced criticism from its allies.