Pakistan agrees with IMF on 14pc inflation, 2pc power hike in budget

KARACHI: Pakistan and the International Monetary Fund (IMF) have agreed to set the target of inflation at 14 percent in the upcoming budget. Pakistan has also assured the IMF that power tariff would be increased by 2 percent from June 1.

The tax-to-GDP ratio has been set at 8.9 percent while the GDP target would be Rs21 trillion.

Meanwhile, the government has decided to remove subsidy on petroleum and electricity in the Budget 2011-12.

It has been projected that tax collection will be around Rs1.5 trillion for the year 2011.

Tax on tobacco products will generate Rs9 billion in revenues while oil companies will pay Rs24 billion in taxes.