ISLAMABAD, Nov 2: The officials of the International Monetary Fund and World Bank currently visiting Pakistan are exerting pressure on the government to withdraw all exemptions on general sales tax (GST) on goods and services.

The mission has also urged the authorities to levy 10 per cent income tax to generate Rs100 billion, needed for bridging the rising fiscal deficit.

Sources said the finance minister seemed to have failed to convince his government of the need to control the rising expenditure and levy the reformed GST as soon as possible. Former finance minister Shaukat Tarin had tendered his resignation following his failure to make the government implement his recipe for reviving the economy.

According to the sources, the IMF is now asking Islamabad to maintain the 17 per cent GST rate and also withdraw all exemptions on goods and services, including pharmaceuticals, pesticides, fertilisers, machinery and tractors expected to hit hard the agriculture sector.

It is estimated that this decision would yield Rs50-60 billion additional revenue for the kitty to finance the rising fiscal deficit.