IMF bailout package: Pakistan to raise tax collection

Meanwhile, the IMF has demanded an increase in tax collection.

ISLAMABAD (Dunya News) – Pakistan and International Monetary Fund (IMF) formal talks on second day have begun on Monday to sort out details of a three-year bailout package for economic reforms. The proposed bailout package is expected to be $8 billion.

The government departments have shared data on taxes, tariff, subsidies and other related issues with the Fund officials. The State Bank of Pakistan is expected to share monetary-related details.

According to sources, the focus of the talks would be on fiscal and monetary policies.

Meanwhile, the IMF has demanded an increase in tax collection.

To which, sources stated that Pakistan had offered extra Rs600 billion tax target to IMF officials during meeting which was attended by Federal Board of Revenue (FBR) chairman and tax officials.

In this regard, it is anticipated that the government could increase GST by 1 percent to 18 percent and the Federal Excise Duty imposed on several items could also be raised.

Furthermore, import duties on luxury items are also expected to increase. A further increase in regulatory, withholding tax and custom duty is also being anticipated. Financial burden on non-tax filers may also swell.

Moreover, alterations in salary slabs of government employees are also expected and subsidies can be reduced.

According to experts, a significant hike in petroleum products could also be observed under the deal as the IMF mission will be briefed on the increase in electricity tariff, purchasing power of rupee and change in the terms and conditions for a loan adjustment.

"Pakistan officials have briefed the IMF officials over tax reforms and limiting tax exemption system was also discussed," sources added.

Meanwhile, Pakistan officials are also trying to reach consensus with IMF officials on amnesty scheme while also briefed over assets disclosure scheme adding that assists disclosure scheme will increase income.

Pakistani officials had told the IMF that money laundering laws will not be assisted in scheme while the assists declaration scheme will be discussed further.

The review mission is analysing the state’s economic data and have engaged in policy-level discussions with Adviser to PM on Finance Dr Abdul Hafeez Shaikh during which terms and conditions of the programme are to be determined. If successful, the mission will sign a letter of intent with Pakistan.

According to details, the ministry of finance had already finalised the summary of data obtained from various institutions including the Federal Board of Revenue (FBR) for talks with IMF.

The Pakistan team is engaging with IMF delegation for technical level discussions based on data and statistics for the first nine months of the current fiscal year.

PM Imran meets IMF, World Bank heads

On Friday, Prime Minister Imran Khan held separate meetings with International Monetary Fund (IMF) Managing Director Christine Legarde and World Bank Chief Executive Officer (CEO) Kristalina Georgieva on the sidelines of second Belt and Road Forum in Beijing.

In his meeting with Managing Director International Monetary Fund Christine Legarde on the sidelines of second Belt and Road Forum in Beijing, the prime minister discussed matters of mutual interests.

Imran Khan also apprised Lagarde of measures taken to improve country’s economy and the government’s planned poverty alleviation.

They discussed prospects for a comprehensive policy package and international financial support to help stabilize the economy of Pakistan.

PM Imran Khan held a meeting with Chief Executive Officer of World Bank Kristalina Georgieva and discussed matters related to mutual interests and financial assistance package for Pakistan.

The prime minister appreciated the role played by the World Bank in regional connectivity, poverty alleviation, financial management, provisional projects, Dasu and other infrastructure projects and ease of doing business.

He informed the World Bank CEO of the recent steps taken by the government for improving the economic and fiscal situation in the country.

Khan also apprised the CEO on the socio-economic uplift measures taken up by the government and creation of "Ehsaas" social welfare programme.

On the occasion, the World Bank Chief Executive Officer pledged to further strengthen cooperation with Pakistan in the areas of disbursements programme lending and guarantees provision for raising external funds.

PM Imran’s five suggestions

On Friday, Prime Minister Imran Khan made five suggestions for progress in his address to the second Belt and Road Forum in Beijing.

The premier said we must undertake joint efforts to mitigate the adverse impact of climate change, establish BRI tourism corridors to promote people to people and inter cultural understanding, anti-corruption office, poverty alleviation fund and concerted efforts to further liberalize trade and investment flows encouraging the private sector and businesses to collaborate in projects.

Imran Khan said Pakistan-China friendship is invincible in every challenge and both countries are cooperating with each other in various sectors.

Imran Khan added that the China-Pakistan Economic Corridor (CPEC) is moving towards its next phase. The Belt and Road Forum helped Pakistan to reduce its power crisis and Gwadar is turning into a commercial hub, he said.

The premier affirmed that Islamabad is providing attractive opportunities to the investors, and told that his government planted five billion trees in Khyber Pakhtunkhwa (KP).

Imran Khan said Pakistan is the first partner of China in this mega project, and thanked Beijing for its unconditional support of Islamabad. The premier had reached China on Thursday (yesterday) on a four-day official visit to attend the second Belt and Road Forum in Beijing.