IMF seeks cut in govt expenditures in fresh contact with Pakistan

ISLAMABAD: The International Monetary Fund (IMF) in fresh contact with Pakistan has demanded to slash expenditures of the federal and provincial governments, quoting sources ARY News reported on Tuesday.

The IMF in pre-budget talks has also demanded to fix the tax revenue target above Rs. 10,000 billion, according to sources.

In virtual talks Pakistan has convinced the lender to move the talks ahead and also requested about the staff level agreement, sources said.

“IMF intending a joint 9th and 10th review of the loan package, but Pakistan wants completing 9th review of the bailout package separately”.

Current session of talks could not achieve any major progress, sources said.

According to sources, the sides also discussed budget figures as the monetary fund advanced its demand to enhance the FBR tax collection to 10,000 billion rupees. It also demanded steps to increase recovery of income tax.

Pakistani negotiators assured the lender of fixing the FBR taxation target at 9,200 billion in the budget.

IMF team also demanded major cut in expenditures of federal and provincial governments and pressed for limiting expenses and subsidy in the next fiscal year’s budget, sources said.

The lender asked Pakistani officials to brief about all steps being taken to increase the foreign exchange reserves. “The volume of new loans and mechanism of its repayment should also be intimated,” IMF team was quoted as saying.

Sources said that the FBR has expressed its reservations over formidable hike in the taxation target while the economic circumstances are very difficult.

State minister Dr. Ayisha Ghous Pasha also attended the session of virtual talks with the IMF, sources added.