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Govt moves to cut taxes on commodities for price reduction

PM Imran Khan asks ministers to strictly monitor price hikes

SAMAA | - Posted: Oct 18, 2021 | Last Updated: 2 months ago
SAMAA |
Posted: Oct 18, 2021 | Last Updated: 2 months ago

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The government has decided to reduce taxes on various commodities in a bid to reduce rising inflation across the country. This was decided at a meeting which was presided over by the prime minister himself. Prime Minister Imran Khan instructed all ministers to activate price control committees and urged them to keep a strict watch on artificial price hikes in their respective constituencies. During the meeting, the premier was briefed about the prevailing economic situation in the country. The meeting also reviewed oil price hike and stressed the need for taking strict action against hoarders. A number of people in Islamabad and Peshawar took to the streets Monday against a hike in prices of essential commodities. The move comes after the government increased petrol prices by Rs10.47 taking it to a record high of Rs`137.47. Meanwhile, Federal Minister for Energy Hammad Azhar announced on Friday that the government has proposed NEPRA to increase the power tariff as Pakistan’s circular debt soars. “An increase of Rs1.39 a unit will be applicable in power tariff from November 1,” he said. “This will not be applicable on consumers using less than 200 units of electricity.” According to experts, the hike is linked with the government's talks with the International Monetary Fund. On October 8, the IMF asked Pakistan to increase electricity tariffs by Rs1.4 per unit to curb the surge in circular debt. The fund asked Pakistan for more steps to increase income tax, sales tax, and regulatory duties collection. IMF has also asked the government to abolish or significantly reduce all kinds of subsidies, according to officials. Talks between Pakistan and the IMF By the end of last week, the talks between Pakistan and the IMF failed to make headway, leaving the sixth review of the IMF programme for Pakistan inconclusive. However, room for discussions still exists and the round of talks could be extended to next week as the Pakistani delegation is expected to prolong its stay in Washington, DC. These are the second round of talks that began on October 4 and were scheduled to end on October 15. The first round of the sixth review was held in June and did not end conclusively. If the sixth review concludes successfully, Pakistan will receive the next tranche of $1b under the program. It will bring the total borrowing from the Fund to $3b.
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The government has decided to reduce taxes on various commodities in a bid to reduce rising inflation across the country.

This was decided at a meeting which was presided over by the prime minister himself.

Prime Minister Imran Khan instructed all ministers to activate price control committees and urged them to keep a strict watch on artificial price hikes in their respective constituencies.

During the meeting, the premier was briefed about the prevailing economic situation in the country.

The meeting also reviewed oil price hike and stressed the need for taking strict action against hoarders.

A number of people in Islamabad and Peshawar took to the streets Monday against a hike in prices of essential commodities. The move comes after the government increased petrol prices by Rs10.47 taking it to a record high of Rs`137.47.

Meanwhile, Federal Minister for Energy Hammad Azhar announced on Friday that the government has proposed NEPRA to increase the power tariff as Pakistan’s circular debt soars.

“An increase of Rs1.39 a unit will be applicable in power tariff from November 1,” he said. “This will not be applicable on consumers using less than 200 units of electricity.”

According to experts, the hike is linked with the government’s talks with the International Monetary Fund. On October 8, the IMF asked Pakistan to increase electricity tariffs by Rs1.4 per unit to curb the surge in circular debt. The fund asked Pakistan for more steps to increase income tax, sales tax, and regulatory duties collection.

IMF has also asked the government to abolish or significantly reduce all kinds of subsidies, according to officials.

Talks between Pakistan and the IMF

By the end of last week, the talks between Pakistan and the IMF failed to make headway, leaving the sixth review of the IMF programme for Pakistan inconclusive.

However, room for discussions still exists and the round of talks could be extended to next week as the Pakistani delegation is expected to prolong its stay in Washington, DC.

These are the second round of talks that began on October 4 and were scheduled to end on October 15. The first round of the sixth review was held in June and did not end conclusively.

If the sixth review concludes successfully, Pakistan will receive the next tranche of $1b under the program. It will bring the total borrowing from the Fund to $3b.

 
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