The federal government is considering the imposition of a flood levy to help rebuild flood-affected areas, with the International Monetary Fund (IMF) reportedly urging Pakistan to take the measure, says in media reports.
According to Finance Ministry, the proposed levy is likely to be implemented through a presidential ordinance. The main objective of the flood levy would be to generate funds for the reconstruction and rehabilitation of areas devastated by recent floods.
Sources indicate that the levy is expected to be applied primarily to imported luxury and non-essential items, ensuring that the common man remains unaffected.
The federal government aims to finance the restoration work through domestic resources rather than acquiring new foreign loans. Officials emphasized that Pakistan does not intend to seek international aid or new borrowing for reconstruction at this stage.
Both the federal and provincial governments are expected to contribute funds for rebuilding flood-hit regions, while the flood levy would serve as an additional revenue stream to support these efforts.
According to an initial report, recent floods caused loss worth Rs822 billion across Pakistan, severely affecting the country’s agriculture and infrastructure sectors.
The report states that the government has requested assistance from development partners to determine the actual scale of damages caused by the floods.
The disaster has affected nearly 6.5 million people across 70 districts nationwide, with Punjab being the worst-hit province due to river overflows in the Sutlej, Chenab, and Ravi.
In Punjab alone, 27 districts suffered extensive damage to agricultural land and residential properties.
Across the country, a total of 229,763 houses were damaged, while 1,037 people lost their lives and 1,067 were injured in the floods.
The IMF has also cautioned that the recent monsoon floods have seriously hurt Pakistan’s economy. Growth may slow, inflation may rise, and the current account deficit could increase.