State Minister for Finance Dr Ayesha Ghaus Pasha has struck back at India, saying Delhi has a history of finding a downside in everything.

“Pakistan will never go bankrupt. Pakistan has made all its payments on time, the minister stressed 

She added the agreement with the IMF has entered the final stage and all the IMF conditions have been met.

She continued: “Negotiations with the IMF will reach a positive conclusion. The National Assembly has approved the Finance Amendment Bill. Electricity and gas subsidies will be withdrawn.

The National Assembly yesterday gave the go-ahead 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.

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. 

The National Assembly approved a supplementary finance bill that increases sales tax from 17 to 25 per cent on imports ranging from cars and household appliances to chocolates and cosmetics.

Pakistan is desperate to unlock the next tranche of a $6.5 billion loan facility. "Those who are making good money in public or private sectors need to contribute to the economy," IMF Managing Director Kristalina Georgieva told German state broadcaster Deutsche Welle at the weekend. "It shouldn't be that the wealthy benefit from subsidies. It should be the poor who benefit from them."

Dar told parliament when tabling the bill this month that the luxury tax would generate an additional 170 billion rupees ($650 million). "These are the items which are widely used by the rich class," he said, adding it would "put the minimum burden on the common man".