The International Monetary Fund (IMF) on Thursday accepted the government’s request to slash the electricity prices by Rs1 per unit, reported 24NewsHD TV channel.
Sources told 24News TV channel that the IMF had also agreed to abolish the federal excise duty (FED) on the property sector but did not allow the government to reduce taxes on the sector.
According to the Fund, relief would be provided to the power consumers from the revenue generated through the levy on the captive power plants.
Meanwhile, the government is working on the introduction of a relief package for consumers, and it will be announced after the approval of the money-lending organisation.
According to the IMF officials, the Climate Fund’s $1.3 billion will be linked to the loan programme.
Similarly, the carbon levy will be imposed under the Vehicles Policy.
The officials further said that the agriculture income tax would be collected from January 2025.
The Fund has turned down the government’s request for a slash in the tax collection target set for the Federal Board of Revenue (FBR).
On Wednesday, the IMF said it had reached an agreement with Pakistan on a new $1.3 billion loan programme under the Resilience and Sustainability Facility (RSF) and reviewed an existing bailout that would, if approved, unlock an additional $1 billion.
The new 28-month deal would support Pakistan's efforts to mitigate and adapt to climate change, the international money-lending organisation said in a statement announcing its decision.
Both the new program and the loan review require approval from the Fund's executive board, which is largely a rubber-stamping exercise.
Pakistan came to the brink of default in 2023, as a political crisis compounded an economic downturn and drove the nation's debt burden to terminal levels.
It was saved by a $7 billion bailout from the IMF and has enjoyed a degree of recovery, with inflation easing and foreign exchange reserves increasing.
But the deal -- Pakistan's 24th since 1958 -- came with stern conditions that the country improve income tax revenue and cut popular power subsidies, cushioning costs of the inefficient sector.
Reporter: Waqas Azeem