A senior finance ministry official confirmed that both the measures have now been dropped. The list included the 0.6% withholding tax on cash withdrawals by non-filers and 1% increase in the General Sales Tax rate to 18%. The still under-consideration proposal to impose 0.6% withholding tax on the deposits could also lead to increase in the currency circulation. In its post-visit statement, the IMF has emphasised “permanent” revenue measures, which can immediately increase tax collection and also withstand court scrutiny. There was a clear view in that meeting that the flood levy would be in violation of the World Trade Organization commitments.
