- Sunday, April 28, 2024
A team from the IMF has reached Islamabad to hold discussions with Pakistani representatives before releasing the final $1.1 billion tranche of a $3 billion bailout package that was agreed upon last year.
By: Shubham Ghosh
THE International Monetary Fund (IMF) has expressed displeasure over claims made by cash-strapped Pakistan that it had achieved all structural benchmarks and quantitative and indicative targets even before the global lender scrutinised and completed the review.
A team from the IMF has reached Islamabad to hold discussions with Pakistani representatives before releasing the final $1.1 billion (£863 million) tranche of a $3 billion (£2.3 billion) bailout package that was agreed upon last year.
According to media reports, IMF mission chief Nathan Porter and his colleagues expressed their displeasure that the Pakistani finance ministry had announced its verdict before the completion of the review process under the $3 billion Standby Arrangement (SBA) programme, which they had just started and would come up with their prescriptions only after analysing the official data of various sectors of the national economy.
Earlier, the ministry announced in its official handout that they had met all structural benchmarks and other targets before getting any feedback from the IMF.
The IMF review mission grilled the ministry’s team in the maiden session of the review talks and everyone seemed clueless about how to respond, Pakistan’s The News International reported.
However, Pakistani finance minister Muhammad Aurangzeb, who assumed responsibility earlier this week after a new government took charge under prime minister Shehbaz Sharif, said that he had taken note of it and such an episode would never be repeated in future.
Pakistan and the IMF kick-started parleys for the completion of the second review and striking an agreement on the Memorandum of Economic and Financial Policies after which the release of the last tranche of $1.1 billion will be presented before the IMF’s executive board in the second week of April.
“The possibility of any mini budget cannot be ruled out at the moment, so the IMF may come up with prescriptions of raising rates of different taxes, especially General Sales Tax (GST) in order to fetch additional revenues on an instant basis. It will only become affirmative if the FBR faces any shortfall in achieving the tax collection target of Rs 879 billion (£2.4 billion) for March 2024,” top official sources confirmed while talking to the newspaper on Thursday.
The IMF team also asked about the possibility of achieving the target for the last quarter (April-June) to meet the desired annual tax collection target of Rs 9,415 billion (£26.5 billion).
The IMF team inquired about the exact timeframe for unveiling the simplified tax scheme for retailers and the political will of the incumbent regime in this regard. The FBR high-ups were not able to reply. The IMF also held crucial talks with energy sector high-ups and asked them to come up with a plan to restrict the circular debt to avoid any further accumulation.
(With PTI inputs)
