No Sales Tax on Petroleum Products, Confirms Finance Minister

Finance Minister Muhammad Aurangzeb on Tuesday confirmed that the federal government will not impose a sales tax on petroleum products.

He said this in an informal conversation with reporters today. He also said the International Monetary Fund (IMF) Executive Board will meet at the end of this month, vaguely hinting optimism at Pakistan’s agenda for the $7 billion bailout agreed last month.

Aurangzeb said Pakistan is facing a financing gap of $3 to $5 billion during the ongoing IMF program. He assured that the gap is manageable and efforts are underway to reduce it. The minister noted that international commercial banks have made loan offers, but the Finance Ministry is carefully considering the interest rates. He assured that loans will not be accepted at high interest rates.

Regarding energy discussions with China, Aurangzeb mentioned the necessity of appointing an adviser for talks on Independent Power Producers (IPPs). Pakistan has already hired an advisor in China concerning the Panda Bond, he added.

Aurangzeb briefly talked about the ongoing digitization of the Federal Board of Revenue (FBR) and the conversion of coal power plants to local coal which could take two to three years to complete.