ISLAMABAD, Jan 15: The government is all set to implement major IMF conditionalities for receiving uninterrupted funds under Poverty Reduction and Growth Facility (PRGF).
A senior official told Dawn that the government has chalked out all necessary work to implement the Funds’ conditionalities latest by August 1, 2002.
According to the details, there will be no new exemptions, special privileges regarding income tax, custom duties or no new regulatory import duties to be imposed in 2002 (except for anti dumping measures) and that all time-bound exemptions and regulatory import duties to lapse without extension, except for existing contracts and exemptions based on international commitments.
The government has assured the Fund officials that it will implement organizational set-up for CBR headquarters by February 28, 2002. A standard general sales tax penalty regime will be applied on retailers along with eliminating GST exemptions for all fertilizers wholesalers and retail trade by March 31, 2002.
Likewise a timetable will be adopted for phasing out, during three years PRGF programme, the GST subsidy on electricity and GST exemptions for edible oil, vegetable ghee, and pharmaceuticals (except for life saving drugs) by July 1, 2002.
The CBR will start operations of a large taxpayer unit, integrating all domestic operations by July 1, 2002.
And the implementation of income tax reform package effective for income earned from July 1, 2002 including: elimination of at least two minor withholding taxes; elimination of at least 55 income tax rebates, concessions, and non-standard exemptions from the Commission for Reform of Income Tax Ordinance (CRITO) list; and lowering the threshold on National Saving Scheme (NSS) subject to withholding tax on interest income from Rs300,000 to Rs150,000 by July 1, 2002.
Further, Karachi Electric Supply Corporation (KESC) will be brought to point of sale by July 31, 2002.
The government will also issue circular allowing banks to purchase from August 1, 2002 foreign exchange from money changers at freely negotiated rates.
A list of intermediate indicators and tracking monetary matrix with base line data for 2000-01, and preliminary annual targets for period 2001-02 to 2003-04 will be prepared.
And by March 31, 2002, the government will also publish rules and regulations including for record keeping under the universal assessment scheme for income tax to be become effective from July 1, 2002.
The government will issue streamlined foreign exchange manual to simplify and clarify rules regarding access to foreign exchange and current account transactions by July 1, 2002.
The government will establish a contributory pension scheme for new recruits in the civil service, and preparation of a third phase public pension reform package, prepared in collaboration with the World Bank and involving actuarially fair reform of early retirement of commutation tables by July 1, 2002.