Prices for sugar, rice, flour, and milk are probably going to “increase” in budget 2024–2025.

Details indicate that the international lender has requested that Islamabad further lower the sales tax exemptions for new loans, which might result in an increase in the costs of milk, tea, sugar, rice, flour, and packed milk in the budget for 2024–2025.

The sources stated that the IMF has insisted on implementing a 5–10% sales tax on the zero-rated sales tax sector and that pressure is being applied to terminate tax exemptions in FATA and PATA by June 30.

Pakistan is expected to gradually remove its exemption from income tax and sales tax, as per the budget proposals for FY2024–2025.

Tractors and insecticides are also being considered for a sales tax by the government, which would result in price increases for these necessary agricultural supplies.

Currently, sales tax is not applied to pesticides and their active ingredients that have been registered with the Department of Plant Protection under the Sixth Schedule of the Sales Tax Act.

After talks with Pakistan earlier on Monday, the IMF issued an official statement. The declaration attested to Islamabad’s official appeal to the IMF for a new loan package.