Pakistani cabinet approves 1% increase in general sales tax in push to unlock IMF funding

Pakistan’s Finance Minister Ishaq Dar speaks during a press conference in Islamabad on February 10, 2023. (AFP/File)
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Updated 15 February 2023
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Pakistani cabinet approves 1% increase in general sales tax in push to unlock IMF funding

  • PM instructs his team of economic managers to put minimum burden on low-income segments
  • Sharif tells cabinet members not to tax daily use items and only increase tariff on luxury goods

ISLAMABAD: Pakistan’s finance minister Ishaq Dar is scheduled to present a supplementary finance bill in parliament today, Wednesday, after the federal cabinet approved increasing general sales tax by one percent and levied additional taxes on luxury items, state-run APP reported.

The measures are part of a reform agenda Pakistan has to fulfill to unlock the latest tranche of a bailout program from the International Monetary Fund. 

According to a statement released by the Prime Minister’s Office, the decision to increase taxes was taken after the cabinet received a briefing on economic reforms under the ninth review of a $7 billion IMF program. Pakistan desperately needs external financing amid its dwindling dollar reserves and a rapidly depreciating national currency.

“The federal cabinet on Tuesday approved the Finance Supplementary Bill 2023 providing for a 1 percent increase in general sales tax and additional taxes on luxury items as part of the reforms related to the International Monetary Fund’s Ninth Review,” state-run APP reported. 

The supplementary finance bill will now be tabled before parliament as President Dr. Arif Alvi has summoned sessions of the National Assembly and Senate.

“All effort must be made to put minimum burden on the low-income segments of the society,” APP quoted Prime Minister Shehbaz Sharif as saying at the cabinet meeting. “Immediate steps should also be taken to increase tax on luxury items.”

The PM issued directives to his economic team not to tax daily use items amid rising inflation which is at a multi-decade high in Pakistan. He highlighted the importance of embracing austerity at the governmental level and said a policy in this regard would be announced soon.


India look forward to Pakistan ‘challenge’ at T20 World Cup

Updated 10 February 2026
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India look forward to Pakistan ‘challenge’ at T20 World Cup

  • Pakistan government late Monday ended a week-long stand-off by rescinding order for its team to boycott Feb. 15 match
  • Pakistan’s decision to go ahead with the match was hailed Tuesday as an outbreak of ‘good sense’ and ‘good for cricket’

NEW DELHI: India said Tuesday it would be “a challenge” to face a “quality” Pakistan team in Colombo after Islamabad U-turned and decided to play the blockbuster T20 World Cup clash.

The Pakistan government late Monday ended a week-long stand-off by rescinding its order for the cricket team to boycott the February 15 match.

“It’s great that the game is back on, we kind of never changed the preparation,” said India assistant coach Ryan ten Doeschate.

India will face a second Group A match against Namibia on Thursday in New Delhi before flying to Sri Lanka.

It means a quick turnaround for Sunday’s match, the biggest and most lucrative clash in world cricket.

“It’s going to be a challenge going to Colombo where Pakistan have been for the last two weeks,” added Ten Doeschate.

“We are delighted to have another chance to play against a quality side in the first phase of the tournament.

“We are fully focused on just bringing our best game to that fixture.”

Pakistan’s decision to go ahead with the match was hailed Tuesday as an outbreak of “good sense” and “good for cricket.”

A frantic weekend of negotiations saw International Cricket Council (ICC) and Bangladesh Cricket Board (BCB) chiefs fly to Lahore on Sunday for talks with the Pakistan Cricket Board (PCB).

The governments of Bangladesh and Sri Lanka both wrote to the Islamabad government on Monday urging it to change its stance and allow the game to go ahead.

After “multilateral discussions, as well as the request of friendly countries, the Government of Pakistan hereby directs the Pakistan National Cricket Team to take the field on February 15,” the Islamabad government said on its official X account late Monday night.

The decision had been taken with the aim of “protecting the spirit of cricket,” it added.

’GOOD FOR CRICKET’

Former India cricketer Madan Lal told AFP on Tuesday that it was “good for cricket.”

“We want strong teams to play so that the charm of the World Cup is not lost,” he added.

Sri Lanka, who will host the match which generates multi-millions of dollars in advertising, broadcast rights, sponsorship and tourism, also praised the decision.

Sri Lankan President Anura Kumara Dissanayake, in a social media post, thanked Pakistan’s Prime Minister Shehbaz Sharif for “ensuring the game we all love goes on.”

Veteran Indian journalist Pradeep Magazine told AFP “good sense has prevailed on all sides.”

Financial considerations would have been taken into account, he added.

“Everyone realized that losing the revenue from an India-Pakistan match would have been a loss-loss situation for all ICC member nations.”

The 20-team tournament has been overshadowed by an acrimonious political build-up.

Bangladesh, who refused to play in India citing security concerns, were replaced by Scotland.

As a protest, the Pakistan government ordered the team not to face co-hosts India in the Group A fixture.

Pakistan, who edged out Netherlands in the tournament opener on Saturday, would have conceded two points if they had forfeited the match.

Pakistan will play all their T20 World Cup matches in Sri Lanka as part of an International Cricket Council deal that ensures the two nations only meet on neutral territory.

India captain Suryakumar Yadav said on Friday before their opening win against the USA that his team would travel to Colombo for the clash, whether the game was on or not.

“We haven’t said no to playing them,” Suryakumar said. “Our flights are booked and we are going to Colombo.”