Pakistan, IMF agree on unchanged tax target after policy dialogues

ISLAMABAD: Pakistan and International Monetary Fund (IMF) have concluded policy dialogues where both sides agreed on continuing with unchanged tax targets which bars increase in taxes till June 2020, citing sources, ARY News reported on Wednesday.

Sources closer to the Finance Ministry told ARY News that the policy dialogues were held between IMF’s mission chief and Pakistani officials headed by Adviser to Prime Minister on Finance Abdul Hafeez Shaikh.

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The dialogues were also attended by the representatives of the finance ministry, Federal Board of Revenue (FBR), privatisation commission, energy, National Electric Power Regulatory Authority (NEPRA), Oil and Gas Regulatory Authority (OGRA) and others.

Read: IMF team visits Parliament, briefs parliamentarians on economy

Sources said that the federal government will not bring mini-budget and no hike will be made in term of taxes till June 2020. Both sides have also held discussion over the Islamabad’s demand to reduce targets of tax revenues for FBR as IMF had expressed dissatisfaction over the board’s performance.

Sources added that IMF and Pakistani officials have agreed to maintain the previous tax targets given to FBR and decided to increase non-tax revenue up to Rs400 billion for achieving it. It is also decided to bring out a comprehensive mechanism for making an increase in electricity and gas prices.

IMF officials urged for a complete end on subsidy to the power sector in the dialogues and asked the government to push the concerned institutions for focusing on reducing losses and recovery of its dues.

Read: Privatization tops agenda as Pakistan, IMF talks enter second phase

Earlier in the day, a delegation of Intentional Monetary Fund (IMF) visited the Parliament House and briefed the members of Senate and National Assembly standing committees on finance and revenue on the performance of economy in second quarter of the year.

“The IMF has urged for opening the economy and taking steps to increase the exports,” Chariman Standing Committee on Finance, Revenue and Economic Affairs Faiz Ullah Kamoka said.

IMF delegation also urged for more free trade agreements with other countries and encouraging small and new exporters in the field. The delegation also urged for the need of improvement in business environment, the finance committee chairman said. Mr Kamoka also said that it seems difficult to achieve the tax targets. The next tranche of the IMF bailout is expected to be received soon after completion of the talks, he said.