Pakistan to increase power tariff

Pakistan will increase electricity tariff by 2 per cent and reduce fiscal deficit through tougher controls on expenditure and additional tax measures.

The country is trying avoid a formal severing of relations with IMF and held an 11-day discussion. But it struggled to convince the agency to stay engaged with it despite failure to introduce economic reforms and come up with clear decision to implement taxation measures, including 15-per cent flood surcharge on income tax.

The IMF put Pakistan`s $11.3 billion standby arrangement in a `technical suspension` in May last year after disbursing about $7.6 billion. A top finance ministry said the two sides had agreed to a revised fiscal deficit target of 5.3 per cent for the current year but that would depend on successful passage of law by the parliament to introduce 15-per cent flood surcharge on income tax and increase in duty rates on imports.