Pakistan’s parliament gave the go-ahead Monday for the government to raise taxes on a raft of luxury imports and services in a bid to unlock the next tranche of an International Monetary Fund (IMF) loan.
Faced with critically low foreign exchange reserves, the government has already halted most imports — apart from food and pharmaceuticals — but hopes to boost revenue with the broad tax hike.
Years of financial mismanagement and political instability have pushed Pakistan’s economy to the brink of collapse, exacerbated by a global energy crisis and devastating floods that submerged a third of the country in 2022.
Parliament approved on Monday a supplementary finance bill that increases sales tax from 17 to 25 percent on imports ranging from cars and household appliances to chocolates and cosmetics.
People will also have to pay more for business-class air travel, wedding halls, mobile phones, and sunglasses.
