Pakistan, IMF talks enter crucial phase

ISLAMABAD: The ongoing talks between Pakistan and the International Monetary Fund (IMF) entered a crucial phase after the reported negotiations on policy-level points, citing sources, ARY News reported on Tuesday.

The State Bank of Pakistan (SBP) Governor Jameel Ahmad hosted a dinner for the IMF mission today. The dinner event was attended by Finance Minister Ishaq Dar, Finance Secretary Hamed Yaqoob Sheikh, Special Assistant to Prime Minister (SAPM) on Revenue Tariq Pasha and SAPM on Finance Tariq Bajwa.

Sources told ARY News that the delegation was headed by the IMF review mission’s chief Nathan Porter. IMF’s Resident Representative for Pakistan Esther Perez Ruiz also attended the dinner.

Sources added that the high-ups from both sides informally held discussions on policy-level topics including the budget deficit, external financing and other key issues.

READ: IMF SOFTENS STANCE ON KISAN PACKAGE, BALOCHISTAN TUBE WELLS SUBSIDIES

Earlier in the day, it was learnt that Pakistan will slash expenditures of Rs600 billion to bring the budget deficit down to an acceptable level.

Preparations are being made to deduct the development budget by 33 per cent, this development budget deduction is likely to cross over 300 billion rupees, according to sources.

The development budget spending will likely be over 400 billion from 727 bln rupees, sources shared. The preparations are on the anvil to stop funding for unnecessary projects, which are only on paper, sources said.

“Subsidy will be restricted from the current fiscal year’s budget,” according to sources. The government have to enhance the power and gas tariffs to bring the subsidy down, sources said.

READ: IMF ASKS PAKISTAN TO ‘DO MORE’ FOR REVIVAL OF STALLED LOAN PROGRAMME

The International Monetary Fund (IMF) also demands monitoring of all projects and this monitoring of various projects will be made public on the website step by step, sources added.

The International Monetary Fund (IMF) has asked Pakistan to ‘do more’ for the revival of stalled loan programme as technical talks have been completed in Islamabad.

During the technical talks, the IMF team remained committed to its demands with regard to increasing General Sales Tax (GST) from 17 to 18 per cent on all goods with a point of view that a one per cent GST hike will help in collecting another Rs 39 billion, sources added.

READ: IMF CONDITIONS: GOVT PREPARES PLAN TO REDUCE PAKISTAN’S CIRCULAR DEBT

The IMF has also emphasised the Pakistani team not only for the abolishment of income tax exemption but to impose a Flood levy to meet FBR’s revenue target in the current fiscal year of 2022-23.

The Fund has also demanded of the Pakistani authorities to increase flood levy on the profit earned by the banks.

The government team will also give a roadmap for the privatization program during the policy talks, sources added.