President Arif Alvi, Ishaq Dar discuss Rs170b mini-budget

ISLAMABAD: Federal Minister for Finance and Revenue Senator Ishaq Dar on Tuesday called on President Dr Arif Alvi at Aiwan-e-Sadr, ARY News reported citing sources.

During the meeting, the finance minister briefed the president on the overall economic and financial outlook of the country. The finance czar also briefed the president on International Monetary Fund (IMF) bailout conditions.

The meeting also discussed the imposition of Rs170 billion in additional taxes through a mini-budget. The federal cabinet is likely to approve the Rs170 billion today.

The incumbent government has accelerated implementing ‘tough conditions’ tabled by International Monetary Fund (IMF) to revive $7 billion Extended Fund Facility (EFF) stalled for months.

According to details, the Fund and Pakistan moved closer to the revival of their loan prgramme as Islamabad has agreed to several conditions including increasing energy prices and improve tax collection, as demanded by the IMF.

Sources told ARY News that the federal cabinet has approved the revised circular debt management plan through circulation, under which the government will end subsidies and jack up electricity price by Rs7.91 per unit in four quarterly adjustments – Feb-March 2023, March-May, June-August and September-November.

Sources further claimed that the federal cabinet also approved the withdrawal of electricity subsidy of Rs65 billion given to the exporters and farmers, with effect from March 2023. The subsidy of Rs12-13 paise per unit on electricity given to export sector will be withdrawn, they added.

Moreover, almost Rs250 billion will be recovered from electricity consumers by June 2023. Under the circular debt management plan, the government would impose a surcharge of Rs3.39 paise per unit.

The government will charge Rs3.21 per unit from now onwards, 69 paise from March-May and increasing again to Rs1.64 per unit from June onwards to August of 2023. From Sep-Nov, the govt will hike power tariff by Rs1.98 per unit.

Earlier on Feb 10, Finance Minister Ishaq Dar had said that Pakistan had received the Memorandum of Economic and Financial Policies (MEFP) draft from the International Monetary Fund (IMF).