ISLAMABAD: Pakistan and the International Monetary Fund (IMF) on Friday concluded the five-day talks with a prescription by the Fund to strictly adhere to meeting the conditionalities of the ongoing $7 billion Extended Fund Facility (EFF).
The visiting IMF team led by its mission chief Nathan Porter on Friday held final meetings with federal and provincial governments’ representatives and asked for meeting the benchmarks and conditionalities for the EFF.
Finance Minister Mohammad Aurangzeb also participated in the final round of talks; however, till the filing of this report neither the Fund nor the Finance Ministry released any details.
IMF team looks at fiscal performance
The IMF team, the sources said, stressed the need to implement tax targets and the National Fiscal Pact.
The talks covered a wide range of economic issues, including provincial budgets, tax reforms, and foreign financing arrangements, where the Fund was convinced by provincial budget surplus.
Sources revealed to Business Recorder that IMF stressed upon accelerating tax revenue collection to meet the tax target of Rs12,970 billion for the current financial year. The IMF team also urged for the collection of taxes on agricultural income starting January 2025.
Sources familiar with the discussions revealed that the government assured the Fund of securing external financing to support its fiscal policies. The government has made firm commitments regarding external financing arrangements, the sources confirmed.
The IMF mission also conducted detailed reviews of various sectors, including property prices across different cities.
On the final day of talks, federal finance minister and officials from the Federal Board of Revenue (FBR) participated in discussions with provincial representatives.
The IMF raised concerns about the timely passage of laws, particularly in Sindh, urging the provincial government to expedite legislation.
Further, Khyber Pakhtunkhwa has made progress in its preparatory work, sources noted.
In terms of provincial budgets, the latest revised figures by the Finance Ministry noted that Pakistan surpassed its surplus target. The provincial surplus for the first quarter of 2024-25 was reported at Rs360 billion, surpassing the target of Rs342 billion set under the IMF agreement. Punjab recorded a surplus of Rs40 billion during July-September, reversing previous data that indicated a deficit of Rs160 billion.
Copyright Business Recorder, 2024
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