Pakistan is facing a chaotic situation over condoms these days. Now, Pakistanis will have to spend more money to purchase condoms after the International Monetary Fund (IMF) rejected the Shehbaz Sharif government’s demand to reduce the 18% GST on contraceptives.
IMF snub on GST relief
According to Pakistani media reports, the Pakistani government had demanded the removal of GST on contraceptive products. After the IMF’s stance, this is being seen as a big jolt for the Shehbaz government, which has been making efforts through these measures to control the birth rate in the country, one of the highest in the world.
IMF rejects GST cut
As per reports, the IMF told Pakistan that it could consider the demand to exempt contraceptives from tax in the next budget year. Pakistan’s economy is currently running on the IMF’s bailout package. Under this programme, the IMF cited the revised revenue target as the reason for its decision and conveyed the same to Pakistan. The IMF also warned about weak tax collection and the threat of smuggling.
Shehbaz govt flags GST burden on poor
The Shehbaz government sought relief from GST, raising concerns that such products are now being seen as meant only for the elite class and have gone beyond the reach of lower-income people in Pakistan. Officials of the Federal Board of Revenue (FBR) raised the issue with IMF officials in Washington during a virtual meeting. If the exemption were approved, an estimated loss of 40–60 crore Pakistani rupees would be incurred.
No tax relief on pads, diapers
The IMF has rejected Pakistan’s plea to reduce GST. The body also opposed reducing taxes on sanitary pads and baby diapers. The decision comes at a time when the country is grappling with problems linked to its growing population. Each year, at a growth rate of 2.55%, around 60 lakh people are added to Pakistan’s population, impacting public services and putting additional pressure on financial arrangements.
