No mini-budget: Pakistan briefs IMF on alternative plan to overcome financial shortfall

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) are currently engaged in high-stakes negotiations in Islamabad.

The federal government has abandoned plans to introduce a mini-budget for FY 2024-25, opting instead for an alternative plan to address the Rs. 605 billion shortfall, ARY News reported citing sources.

According to sources, Pakistan is facing a significant financial shortfall, with a staggering Rs. 605 billion needed to meet its financial obligations.

Earlier, the government was anticipated to bring the mini-budget but now it opted other option. A key aspect of the plan involves the swift resolution of tax-related cases pending in various courts.

Prime Minister (PM) Shehbaz Sharif has assured full cooperation in this regard, while Chief Justice of Pakistan Yahya Afridi has also approved the request to expedite the hearing of tax-related cases.

According to sources, the IMF has also been briefed on the plan. A crucial hearing on the matter is scheduled to take place in the Supreme Court on March 10.

The sources said that if the verdict comes in favour of the government, the Federal Board of Revenue (FBR)  is expected to recover a substantial amount of Rs. 157 billion.

“The FBR has already secured a tax amount of Rs. 23 billion under Section 99D,” the sources added.

Earlier, the IMF ‘asked’ Pakistan to achieve revenue shortfall in the next fiscal quarter, ARY News reported on Wednesday, citing sources.

Read More: Pakistan, IMF hold talks on review of loan program

“There is no room for revenue shortfall,” IMF delegation led by Nathan Porter reportedly told Pakistan during the talks to unlock $1 billion loan tranche of $7bln loan programme.

Sources revealed that during the talks Pakistan and the IMF held extensive discussions on key economic and financial matters. During prolonged sessions, officials from the Ministry of Finance and State Bank of Pakistan (SBP) engaged with the IMF delegation on various subjects, including Islamic banking reforms, refinance schemes, and the development finance transition.

The IMF delegation urged the operationalization of the Bank Resolution Framework to strengthen the banking sector and reduce financial risks.