The International Monetary Fund (IMF) has rejected the Pakistan government’s demand for immediate removal of the 18% General Sales Tax (GST) imposed on contraceptive products (condoms).
This decision of IMF is a big blow to the government of Pakistan, because the country is increasing population and efforts are being made to make birth control measures cheaper.
Pakistan is currently among the fastest growing populous countries in the world. This decision of IMF has dealt a big blow to Pakistan. The economic condition of Pakistan is already in the news. In such a situation, he wanted to make contraceptive products cheaper by removing 18% GST. So that people can buy it easily. But it has got a big blow due to the decision of IMF.
Relief may be available next year
The IMF said that such tax exemption or tax cut can be considered at the time of the next budget. The IMF argues that such a change could weaken the tax collection system and could also increase the risk of smuggling. Pakistan is currently trying to recover from the economic crisis under the IMF’s bailout package and is facing difficulty in meeting its revenue targets.
Pakistan’s Federal Board of Revenue (FBR) had sent a proposal to the IMF, demanding GST exemption on contraceptive products. In this proposal, the government estimated that this could lead to a revenue loss of 40 to 60 crore Pakistani rupees. However, the IMF did not approve it. The IMF has also opposed the proposal to give tax exemption on women’s sanitary pads and baby diapers.
A matter of concern for Pakistan
This decision is even more of a matter of concern for Pakistan, because the country is facing a serious demographic crisis. Pakistan’s population growth rate is approximately 2.55%, which means that about 6 million people are added to the population every year. This is increasing pressure on public services and income of common people. Pakistan is adhering to strict conditions under the IMF’s bailout programme, which demands reforms in taxes, government spending and revenue collection.