After the International Monetary Fund (IMF) reiterated its stance on imposing taxes, Pakistan's National Assembly on Tuesday approved a money bill aimed at raising tax revenues to fulfill the demands of the global body.
The crisis-hit nation is seeking a $1.1 billion loan facility from IMF to avoid an economic meltdown. IMF chief on Friday insisted 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.
Parliament approved on Monday a supplementary finance bill that increases sales tax from 17 to 25 percent on imports ranging from cars and household appliances to chocolates and cosmetics, reported the news agency AFP.
ALSO READ: China's Top Diplomat Calls For Negotiations To End Hostilities Ahead Of Moscow Visit (abplive.com)
This means people will have to pay more for business-class air travel, wedding halls, mobile phones, and sunglasses.
Finance Minister Ishaq Dar, who said the bill was passed with minor amendments, added: "We will have to take difficult decisions. The prime minister will also unveil (further) austerity measures in the next few days,"
The bill was introduced last week with the aim to get approval by the weekend, but it could not get clearance due to resistance from its allies. In his speech, Dar held the mismanagement in the power sector and poor economic policies of the previous Pakistan Tehreek-e-Insaf (PTI) government responsible for the current financial crisis.
The bill would help avail the IMF-dictated Rs 170 billion by June end at the end of the current financial year.
The new taxes accompanied by other measures by the government would further burden the masses with inflation which is already high.
The measure brings the cash-starved nation Pakistan closer to availing $1.1 billion tranche from the IMF to support its dwindled foreign exchange reserves which are critically low to just over $3 billion.