IMF bailout package: Pakistan's economic policies to be reviewed today

The Pakistani delegation is led by Adviser to PM on Finance Dr Abdul Hafeez Shaikh.

ISLAMABAD (Dunya News) – Pakistan and the International Monetary Fund (IMF) on Wednesday are scheduled to hold another meeting in Islamabad where the proposed three-year bailout package and the state’s economic policies will be discussed. The proposed bailout package is expected to be around $8 billion.

The fresh round of talks will focus on the tax amnesty scheme by the Federal Board of Revenue (FBR), privatisation programme, power and gas tariffs, and the government’s economic policies.

The Pakistani delegation is led by Adviser to PM on Finance Dr Abdul Hafeez Shaikh, three additional secretaries and a senior joint secretary from the finance ministry.

Besides, secretaries of the Power Division, Petroleum Division, and the chairmen of the FBR and Securities and Exchange Commission of Pakistan are also participating in the talks.

Earlier on Monday, Pakistan shared data on taxes, tariff, subsidies and other related issues with the IMF officials. The IMF had 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.

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.

The visiting IMF delegation, which arrived in Islamabad on Monday, is expected to conclude the technical details of the proposed loan by May 6.

PM Imran Khan meets representatives of IMF, World Bank Group 

On Friday, Prime Minister (PM) 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, China.

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.

After the meeting, the IMF director took to Twitter, and stated: "I was glad to meet Prime Minister Khan of Pakistan today in Beijing. We discussed prospects for a comprehensive policy package and international financial support to help stabilize the economy of Pakistan, and also the need to strengthen governance and protect the poor."

I was glad to meet Prime Minister Khan of Pakistan today in Beijing. We discussed prospects for a comprehensive policy package and international financial support to help stabilize the economy of Pakistan, and also the need to strengthen governance and protect the poor. pic.twitter.com/zrxOsEnTWS

— Christine Lagarde (@Lagarde) April 26, 2019