Leading Issues in the Economy of Pakistan: Agenda for Reforms of presentation of the budget for 2022-23. As such, the sales tax may be restored soon without any significant change in retail prices of petroleum products. Chart 7.1: Progress on Implementation of Reforms ACTION/ REFORM PROGRESS TAX POLICY • Raising Petrol Levy to Rs 50 per litre on Motor • Only partial progress Spirit and HSD oil • Harmonization of the Sales Tax on Goods and Services • No agreement yet on classification of goods and services respectively • Restoring GST on POL products in the event of• Big shortfall in revenue from petroleum levy revenue shortfall but no GST restoration yet • Reduce stock of income tax arrears.• Only partial achievement of quarterly target • Increasing number of income taxpayers by 300,000 • Number of income tax returns filed for 2021­22 decreases MANAGEMENT OF EXPENDITURES • Reducing subsidies in 2022-23 by 50% to Rs 570 billion • Payment of subsidies increased in first quarter by 26% • Limiting Guaranteed Loans to SOEs• Big increase of 21% in the first six months MONETARY, EXCHANGE RATE AND FINANCIAL SECTOR POLICIES • Commitment to market-determined exchange• Demand for dollars managed by physical rate control by SBP on LCs • Pace of future adjustments in the policy rate will depend on inflation rate • Policy rate raised to 16% by 100 basis points • Phasing out subsidized refinancing schemes of SBP* • Done • Effective implementation of AML/CFT Framework* • Pakistan successfully exits from the FATF Grey List ENERGY SECTOR POLICIES • Increase in Electricity Tariff by 7.90 Rs per kwh• Not implemented • Reducing the Circular Debt stock• Circular debt has increased • Updating of Gas Prices• Not yet implemented SOEs • Passage of SOE’s Law* • Passed • Central Monitoring Unit to be set up in MOF• Not yet • Advancing Privatization of SOEs• No progress * Reforms which have been successfully implemented. The target for increasing the number of income tax payers has not been met. Also, there has not yet been full elimination of income tax arrears. 86