ISLAMABAD: In a bid to secure a new loan program, Pakistani officials engaged in rigoros negotiations with the International Monetary Fund (IMF) review mission.
The dialogue witnessed the international money lender putting forth a series of stringent demands, underscoring the imperative need for comprehensive reforms within Pakistan’s economic landscape.
Key among the demands outlined by the IMF is the freezing of revolving credit for electricity and gas, coupled with an immediate cessation of theft in these sectors.
Furthermore, the IMF insisted on halting the local gas supply to power plants, emphasizing the urgency of complete digitisation within the Federal Board of Revenue (FBR).
Additionally, the IMF pressed for the swift transition of Distribution Companies (DISCOs) into private sector administration, highlighting the necessity for a clearly defined timeline.
Expressing deep-seated concern over the persistent surge in commodity prices within Pakistan, the IMF delegation questioned the disparity compared to global trends, urging the Pakistani authorities to take decisive measures to curb inflation.
Of particular contention was the provision of subsidised gas to fertilizer plants, with the IMF adamantly calling for its discontinuation. Concrete steps to combat electricity and gas theft were also underscored as non-negotiable requisites for the loan program.
In response to these demands, Pakistani authorities committed to utilising technology to enhance tax collection, affirming their determination to meet the tax target for the current fiscal year.
Moreover, assurances were made regarding the incorporation of the real estate, manufacturing, and retail sectors into the tax system, with emphasis placed on bolstering revenue generation.
FBR Chairman Amjad Zubair Tiwana reiterated Pakistan’s commitment to achieving the tax target of 9415 billion rupees for the fiscal year, vowing to do so without resorting to a mini-budget. The Finance Minister echoed this sentiment, pledging full cooperation with the IMF on the reform agenda.
The disbursement of the final installment of $1.1 billion hinges upon the successful completion of the second economic review, marking a pivotal juncture in Pakistan’s economic trajectory.
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