The government will impose RS170 billion in tax through a mini-budget in the coming days with the approval of the parliament to generate additional tax revenue. On Friday Ishaq Dar briefed on the IMF deal was crucial in imposing RS 170 billion in taxes which are requirements of the IMF deal. He said the government agreed to generate an additional RS 170 billion in new taxes. The government would not impose any such tax which would impact the public.
A new tax and a new finance bill will present in the parliament. After a positive conclusion of staff-level talk on extended fund facility, Pakistan and IMF had a virtual discussion on the memorandum of economics and financial policies on Monday. The good news is that as per their commitment, the team has gone according to their plan, and we have received their MEFP. The draft is with us government will study and discuss it with IMF through virtual discussion. Once completed and approved by the IMF executive board Pakistan would receive the next tranche of SDR 894 million ($ 1.2 billion).
The minister said ten days of dialogue with the IMF concluded positively as there was no doubt about anything. The final round was on Thursday during that meeting, and we mutually agreed and finalized all things. Both sides mutually understood to complete this program for the second time in the country’s history. In addition, the government has to full fill its sovereign commitments. The PM had a zoom meeting with a team of IMF. The things agreed from the finance team would implement. Dar said that the government was commit to reforming the energy sector to reduce the losses.
The cost of electricity generation was RS30,000 billion whereas recovery was just RS18,000 billion resulting in a huge loss. The government prioritized implementing energy reform and doing away with untargeted subsidies. The finance minister said the government is also committed to zero debt in the gas sector to rationalize the sector. The government also pursued the agenda for privatization to stop the bleeding of resources.
The bad policies of the Pakistan Tehreek-e-Insaf government created a gap between IMF and Pakistan. PTI is responsible for the current situation. IMF said considerable progress did a policy measures to address the domestic and external imbalance. The IMF team welcomed the prime minister’s commitments to implement policies needed to safeguard macroeconomic stability and thanked the authority for the constructive discussion.
