IMF assured of no ‘new tax amnesty’ as talks underway

ISLAMABAD: The Federal Board of Revenue (FBR) has assured the International Monetary Fund (IMF) mission visiting Pakistan of not introducing ‘any new tax amnesty scheme’ as talks underway for the next installment of $710 million this week, ARY News reported on Friday, citing sources.

An IMF review mission landed in Pakistan on November 2 and reviewed the country’s progress on targets set in a $3 billion programme approved in July this year to bail out the struggling economy.

The IMF executive board had approved the nine-month standby arrangement (SBA) with Pakistan “to support its economic stabilisation programme”. Following the approval by IMF board, the lender disbursed an installment of $1.1 billion to Pakistan.

If the second quarterly review is successful, it will allow for the release of the second tranche worth $710 million.

Sources told ARY News that the Federal Board of Revenue (FBR), in its first meeting with IMF review mission, presented a report regarding the tax performance of July-September.

The report encompassed revenue target, payments of refunds and tax rebates as dictated by the IMF during its previous meeting with Pakistan delegation.

Read More: Pakistan ‘completes’ IMF conditions for next review

The report mentioned that the target of income tax refunds during the period of July-September has been achieved.

The revenue board also assured the delegation of achieving the revenue target of Rs9.415 trillion. Moreover, the review mission was also assured of not introducing ‘any new tax amnesty scheme’.

The FBR report stated that income tax refund payments were being gradually reduced according to the plan. The board did not give tax exemption during the first July-September quarter as agreed in the loan programme.

Finance minister briefs IMF

It is pertinent to mention here that the caretaker government and the International Monetary Fund (IMF) kicked off the much-awaited loan review talks.

A day earlier, interim Finance Minister Shamshad Akhtar briefed the International Monetary Fund (IMF) mission on the steps being taken by the government to “improve the economic situation”.

A statement issued by the Ministry of Finance said that the finance minister welcomed the delegation and shared progress on the SBA.

“The minister briefed the mission on fiscal measures being taken by the government to improve the economic situation,” the statement said.

It added that the meeting also included discussions on comprehensive reforms and measures undertaken by the Federal Board of Revenue (FBR) and the government’s strategies to address the circular debt issue.

Read More: IMF appreciates Pakistan’s commitments to meet targets

The statement said that IMF mission chief Nathan Porter “appreciated” the government’s commitment to meeting the first quarter targets, and “commended the government’s efforts and measures taken in some critical areas”.

“He further underscored the importance of the continuation of these efforts to stay on track for the economic stability of the country,” it added.

The statement added that the interim finance minister appreciated the “continued support and assistance” of the Fund. She also reaffirmed the government’s commitment to working closely with the IMF “to ensure the successful completion of the SBA and achieve the economic objectives,” the statement said.

During the next week, the IMF team would engage with power and petroleum divisions the State Bank of Pakistan and key state-owned enterprises besides officials of the Benazir Income Support Programme (BISP).