IMF agrees with Govt’s proposal to reduce electricity prices

The International Monetary Fund (IMF) agreed to the government’s proposal to reduce electricity prices, with the final decision expected next month.

Sources reported that electricity base invoices could be reduced from RE1 to RS2 per unit, both with the National Electricity Regulatory Authority (Nepra) and the Ministry of Energy, which is now authorized to adjust the percentages.

However, the IMF expressed concern about delays in the privatization of DISCOS. The IMF said that improvements in the energy sector are unlikely without first dealing with the performance of these companies.

The IMF also rejected the proposed amendments to the Ministry of Energy to Nepra.

Meanwhile, critical talks on circular energy debt were set on Tuesday, with ongoing discussions on the collection of revenue from the Federal Revenue Council (FBB), agricultural taxes and property taxes.

A new IMF delegation is expected to arrive after the EID to discuss government issues with the Pakistani government.

In the relevant developments, Pakistan’s policy debates with the IMF continue, with the country informing the IMF’s mission on the implementation of strict conditions.

Pakistan presented a milestone report on the law on agriculture tax income, setting the tax rate on agricultural income in accordance with corporate sector standards.

The provinces have now completed the necessary legislation, with uniform agricultural income tax rates across the country. By law, agricultural income up to RS600,000 will not be taxed.

The income between RS600,000 and RS1.2 million will be taxed at 15%, while the income between RS1.2 and RS1.6 million will face a fixed tax of RS90,000. For income between RS1.6 and RS3.2 million, the fixed tax will be RS170,000, with an additional 20% tax on profits exceeding 1.2 million Rs.

In addition, for the income between RS3.2 million and RS5.6 million, the tax will be set at RS650,000, with a tax of 40% of the profits of more than RS3.2 million. Agricultural incomes of up to the RS5.6 million will charge a fixed tax of 1.61 million Rs and profits beyond it will be taxed at 45%.