Pakistan to 'raise' FBR tax-GDP ratio to 15% in new IMF deal

ISLAMABAD: Pakistan has targeted raising the FBR tax-GDP ratio to 15 per cent in the International Monetary Fund (IMF) deal, ARY News reported citing sources.

According to sources within the Finance Ministry, the state bank reserves will be kept equal to three-month import bills.

Sources said that the ministry has also set a target to decrease the current account deficit and keep the primary balance surplus.

The ministry maintained that a new programme will be signed with IMF after the expiry of the current deal and IMF will also be assured of the implementation of conditions before finalization of the deal.

Earlier today, the International Monetary Fund (IMF) expressed willingness to work with the new Pakistani government by ignoring the demand of Pakistan Tehreek-e-Insaf (PTI) founder to hold an audit of the election results before approving any new loan for Islamabad.

Read more: Pakistan to seek at least $6 billion in ‘new IMF loan programme’

Yesterday, Bloomberg News reported Pakistan plans to seek a new loan of at least $6 billion from the International Monetary Fund to help the incoming government repay billions in debt due this year.

The country will seek to negotiate an Extended Fund Facility with the IMF, the report said, adding that the talks with the global lender were expected to start in March or April.

Pakistan averted default last summer thanks to a short-term International Monetary Fund bailout, but the programme expires next month and a new government will have to negotiate a long-term arrangement to keep the $350 billion economy stable.

Ahead of the bailout, the South Asian nation had to undertake a slew of measures demanded by the IMF, including revising its budget, a hike in its benchmark interest rate, and increases in electricity and natural gas prices.

The IMF staff continues a dialogue with authorities on needed longer-term reform efforts, a spokesperson for the fund said, adding that the fund is available if requested, to support the post-election government through a new arrangement to address Pakistan’s ongoing challenges.