IMF-pressured Pakistan will impose Rs170 billion new taxes. Federal Finance Minister Ishaq Dar stated that Pakistan has reached an agreement with the International Monetary Fund and that the government has received the Memorandum of Economic and Financial Policies (MEFP) from the global lender.
Speaking at a news conference in Islamabad on Friday, hours after the IMF issued a statement on its website about talks with Pakistan, an upbeat Ishaq Dar insisted that talks with the IMF ended on a positive note.
The finance minister stated once more that Pakistan would complete the IMF programme and implement the policies that it had agreed to with the global lender. He announced that the government would have to present a mini-budget and levy new taxes.
“Government will impose new taxes worth Rs170 billion,” the finance minister said adding that the petroleum development levy target was almost achieved. We will have to increase the PDL from Rs40 to Rs50 to fully achieve the target, he added.
IMF-pressured Pakistan will impose Rs170 billion new taxes. He said that the government needed to stop the flow of rising circular debt in the gas sector.
The finance minister said that the 10-day-long discussions with the IMF mission were extensive covering the power, and gas sectors and the fiscal and monetary side.
The SBP governor and different sectors were involved in the talks, he added.
Dar stated that the government expected the Fund to release a $1.2 billion tranche. He stated that the IMF provided the final points that were reviewed in the virtual meeting yesterday.
He announced that another virtual meeting would take place on Monday (February 13). He stated that Prime Minister Shehbaz Sharif also assured the Fund that the IMF programme would be implemented. He stated that the final round of the IMF’s ninth review talks concluded yesterday and that all issues had been resolved with the global lender.
Dar said that the IMF had asked us to slap a 17% sales tax on petrol which we did not agree with. He, however, said that the global lender was assured that there would be no rise in the gas circular debt.
He expressed his optimism that after the successful talks with the IMF, the friendly countries would start providing economic assistance to Pakistan.
On depleting forex reserves, the finance minister said that “we have made big payments to the lenders. We have made $2 billion repayment to a country while repaid another $1 billion to another country”. He said that the previous government reneged on the agreement it had made with the IMF.
Dar said that in the power sector, the total expenditure was in the region of Rs3,000 billion while the recovery was Rs1,800 billion.
“It’s the need of the hour that we introduce reforms and reduce electricity and gas losses,” he said adding that the PDM government was fulfilling the agreement, the previous Imran government had reached with the IMF.
He said that the economy suffered massively during the last five years due to the inefficiency and ineptness of the previous government.
