President Arif Alvi signed on Thursday, the Finance (Supplementary) Bill 2023, the government's much-needed move for the $1.1 billion tranche of the International Monetary Fund (IMF) loan.
The finance bill or "mini-budget" has been approved under Article 75 of the Constitution of Pakistan.
The federal government on Monday, passed the Finance (Supplementary) Bill 2023, amid the talks with the global lender in adherence to its conditions to help cushion Pakistan's dwindling economy.
The bill increases sales tax from 17-25%on imports ranging from cars and household appliances to chocolates and cosmetics. A general sales tax was raised from 17% to 18%.
People will also have to pay more for business-class air travel, wedding halls, mobile phones, and sunglasses.
The bill was followed by the austerity measures unveiled by Prime Minister Shehbaz Sharif, which Finance Minister Ishaq Dar had termed as "difficult decisions".
The premier unveiled a host of austerity measures to save Rs200 billion — aimed to keep the country afloat as the nation buckles up to meet the IMF's terms.
"IMF programme will soon be revived, InshaAllah, as there are one or two items that are left to be implemented," the prime minister said during his address to the federal cabinet in Islamabad on Wednesday.
"I had a constructive discussion with parliamentarians about the economy's progress. The nation is going through a tough time. We will have to learn from our past mistakes and move forward," he said.
Pakistan is desperate to unlock the next tranche of the loan facility but is struggling to meet tough conditions set by the global financier, which demands the country to boosts its pitifully low tax base, end exemptions for the export sector, and raise artificially low energy prices that are meant to help poor families.
The nation is in dire need of funds as it battles a wrenching economic crisis as the State Bank of Pakistan (SBP)-held foreign exchange reserves barely cover one month of imports.
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