The International Monetary Fund has asked the government of Pakistan to end tax exemptions and impose Rs1,300 billion in taxes.

The Fund has asked the government to raise general sales tax to atleast 18% on commodities from essential food items and medicine to petroleum products.

Raising revenue from taxation will also require that all tax exemptions are ended, IMF experts say.

The Fund’s estiamtes say that upto 1.3% of the GDP can be gained through these additional tax measures.

The Fund’s team had last visited Pakistan in December 2023, and although talks took place with the caretaker government, the new administration is likely to have his hands full.

Pakistan is still waiting for the third installment of the stand-by agreement that was concluded in July last year.

The country is already dealing with historically high inflation and interest rates. However, additional taxation will put more burden on the population.