The international Monetary Fund has shown its grievances over the stage wise implementation of Tax reforms by the Government of Pakistan. The Government of Pakistan has conveyed IMF that in the first phase a draft bill will be prepared by Federal Government in consultation with the provincial governments by the end of October, 2010 for implementing sales tax on services. The Central Government will collect tax on services like financial services, advertising, construction and franchise and then this will be distributed among the provincial governments. Pakistan has also informed IMF that the reformed GST bill will be approved by the cabinet and parliament by mid of November 2010. The Government is also planning to gradually withdraw tax subsidies/exemptions on the sales of fertilizers, tractors and some other agro-products. This would help in getting about Rs 27 billion during the year.
On the other hand the IMF has the Government of Pakistan to provide a clear time frame for the implementation of tax reforms and other steps suggested by the IMF for the revival of the economy in Pakistan. The next release of loan tranches from IMF and other financial institutions like WB and ADB depends on the measures taken by the GOP.