ZULFIQAR AHMAD

ISLAMABAD: Federal cabinet blocked the approval of additional taxes on solar energy users and directed a review of the net metering policy.

The decision was made during a federal cabinet meeting chaired by Prime Minister Shehbaz Sharif on Wednesday.

It ratified the decisions taken by Economic Coordination Committee (ECC) in its meetings held on March 13, 2025, and March 21, 2025.

However, it decided to expand the scope of consultation on solar net metering regulations approved by ECC and resubmit the recommendations to the cabinet after receiving additional feedback from all stakeholders.

The cabinet approved utilising reductions in petroleum products’ prices to lower the electricity tariffs for consumers.

The cabinet also endorsed the Power Division’s recommendation to use savings from reduced fuel prices to bring down electricity costs.

Additionally, the cabinet granted approval to the Central Power Purchasing Agency (CPPA) to sign revised agreements with power plants operating on baggasse.

Amendments to the Whistleblower Protection and Vigilance Commission Act, 2025.

It also approved further modifications to income tax, sales tax on services, and federal excise duties within the Islamabad Capital Territory. These modifications are part of the Resource Mobilization and Utilization Reform Programme, with some initial changes made in 2023 and 2024.

Furthermore, the cabinet reinstated tax rebates for contractual teachers and researchers through the approval of the Income Tax Second Amendment Bill, 2025.

The cabinet, on the recommendation of the Ministry of Law and Justice, approved in principle the Whistleblower Protection and Vigilance Commission Act, 2025.

Prime Minister Shehbaz Sharif lauded the successful staff-level agreement with International Monetary Fund (IMF) for a new $1.3 billion arrangement, terming it a major milestone in the country’s journey towards economic stability.

The prime minister, while chairing a meeting of the federal cabinet, highlighted the collective sacrifices of the nation and the efforts of his team in securing a new $1.3 billion arrangement with IMF as well as successful completion of the first review of the ongoing 37-month bailout programme.

He subtly criticised the opposition Pakistan Tehreek-e-Insaf (PTI), saying those anticipating that a mini-budget would be inevitable to secure the deal should know that the agreement was reached without any new taxes and mini-budget, demonstrating the government’s determination and strategic planning.

He stressed the need for reducing debt to foster sustainable economic growth, adding that the path to economic stability is long and fraught with challenges, yet “we will overcome the challenges confronting the country through unwavering effort and commitment.” Sharif also acknowledged the hardships faced by ordinary citizens, especially the salaried class who had to endure rising prices while striving for economic stability.

He continued that the government is set to receive $1.3 billion from the IMF, which will enhance the country’s foreign reserves to $8.3 billion, a significant milestone in stabilising the country’s economy.

He also recognised the vital role played by all provincial governments and their chief ministers in helping the federal government secure the crucial IMF agreement.

Emphasising the government’s success in exceeding tax collection goals, he claimed that while the IMF had targeted a 10.2 percent tax-to-GDP ratio, the economic team’s strong performance has pushed it to 10.6 percent, marking the highest achievement in the last four years.

“This excellent performance indicates a 26 percent rise in tax revenue to date,” he added.

“The country’s tax collection goal for the fiscal year 2024-25 was set at Rs12.9 trillion. Although the IMF initially recommended lowering this target, I firmly advocated for keeping the original figure. After successful talks, the target, which had been reduced to Rs12.1 trillion, was revised to Rs12.3 trillion,” he added.

Sharif also highlighted the government’s efforts to expedite tax-related cases pending before different tribunals, which amount to billions of rupees, and said that the efforts led to the recovery of Rs34 billion.

He highlighted that the Federal Board of Revenue (FBR)’s initiative for faceless customs assessment (FCA) in Karachi was making good strides, and the process of hiring international corporate lawyers was underway.

Sharif claimed that due to the government’s reforms in the sugar industry, an extra Rs12 billion in taxes has been collected this year compared to last year, with hope to hit a total of Rs60 billion by the end of the year.

“This approach will soon be applied to the cement, tobacco, and textile industries,” he added.

About the Ramadan Package, he stressed that, unlike previous years, the government had introduced a new digital wallet system to distribute funds to eligible families transparently.

He stressed the need for promoting peace and eradicating the menace of terrorism, saying peace growth and economic development are interlinked.

The prime minister commended Deputy Prime Minister Ishaq Dar, Finance Minister Muhammad Aurangzeb, Planning and Development Minister Ahsan Iqbal, Commerce Minister Jam Kamal, Minister for Energy Ali Pervaiz Malik, Federal Board of Revenue (FBR) Chairman Rashid MehmoodLangrial, along with other senior officials for their efforts in successfully finalising the agreement.

Without going into detail, the prime minister quickly noted that “the army chief Syed Asim Munir Shah was instrumental in finalising the IMF agreement.”

He welcomed the Nishan-e-Pakistan award conferred on late Zulfikar Ali Bhutto by President Asif Ali Zardari, calling it a fitting tribute to a “national icon.”

The meeting also offered Fateha for the mother of Chief of Army Staff Gen Asim Munir, who passed away two days ago in Rawalpindi.