IMF engages in tough talks with Pakistan as country shares coming 2022-23 budget features

Islamabad [Pakistan], June 9 (ANI): International Monetary Fund (IMF) drives hard bargain with Pakistan as the fund engages in tough talks by the indicated placement of four to five major prior actions for the revival of the stalled USD 6 billion programme.

Pakistan and the IMF held virtual talks on Wednesday night whereby the Pakistani side shared the features of the coming budget 2022-23. The IMF placed major prior actions, including taxation measures, to fetch Rs 7.255 trillion in the next fiscal year, reported The News International.

The Pakistani government has proposed an outlay of Rs 9,500 billion federal budget. Earlier, at the time of completion of the 6th review under the Imran Khan-led PTI regime, the reform of Personal Income Tax (PIT), was the structural benchmark of the IMF program.

It was agreed that the PIT reforms would be introduced on the occasion of the FY 2023 budget.

Now if the Pakistani government deviates from implementing these reforms then it would have to come up with an alternate plan to fetch revenues up to the desired mark in the coming budget.

However, the government showed reluctance to move ahead as desired by the IMF on the occasion of the completion of the sixth review in February 2022 under the PTI-led regime.

The IMF side also expressed concern over the outstanding repayments to Chinese Independent Power Producers (IPPs) under the China-Pakistan Economic Corridor (CPEC), as Prime Minister Shehbaz Sharif approved the release of Rs 50 billion out of total outstanding dues of Rs 300 billion. Now, the fund is asking about the repayment schedule on this account.

The IMF has also asked about alternate plans to meet the Federal Board of Revenue (FBR's) envisaged target of Rs7.255 trillion in the coming budget.

The IMF has estimated that the FBR's collection would be standing at Rs6,000 billion for the outgoing fiscal year and the FBR would have to collect Rs1,255 billion to meet the desired target in the next fiscal year.

With nominal growth of 16.5 per cent, the FBR's collection would touch Rs6,700 billion so the IMF is inquiring about the plan for collecting the remaining Rs550 billion for touching the revenue collection of Rs7,255 billion for the next financial year.

Pakistan and the IMF discussed the proposed increase in electricity tariff, subsidies on POL prices, and expected budget deficit for the coming financial year 2022-23. The government has envisaged Rs578 billion for subsidy on electricity as Rs 500 billion subsidies proposed for FY2023, RLNG to get Rs20 billion subsidy and Rs 50 billion subsidies for the industrial sector.

Pakistan and the IMF remained engaged on one of the toughest rounds of parleys for finalising budgetary figures for the upcoming budget amid the lingering severe macroeconomic and fiscal crisis being faced by the country. This crisis-like situation was aggravated owing to skyrocketing POL and commodities prices in the international market. (ANI)

Source: WORLD