ANL 11.28 Increased By ▲ 1.00 (9.73%)
ASC 9.50 Increased By ▲ 0.41 (4.51%)
ASL 11.24 Increased By ▲ 0.25 (2.27%)
AVN 78.01 Increased By ▲ 0.41 (0.53%)
BOP 5.51 Increased By ▲ 0.11 (2.04%)
CNERGY 5.41 Increased By ▲ 0.08 (1.5%)
FFL 6.76 Increased By ▲ 0.16 (2.42%)
FNEL 5.91 Increased By ▲ 0.06 (1.03%)
GGGL 11.30 Increased By ▲ 0.21 (1.89%)
GGL 16.78 Increased By ▲ 0.25 (1.51%)
GTECH 8.99 Increased By ▲ 0.58 (6.9%)
HUMNL 7.20 Increased By ▲ 0.06 (0.84%)
KEL 2.96 Decreased By ▼ -0.04 (-1.33%)
KOSM 3.46 Increased By ▲ 0.25 (7.79%)
MLCF 27.15 Increased By ▲ 0.15 (0.56%)
PACE 3.10 Increased By ▲ 0.10 (3.33%)
PIBTL 6.11 Increased By ▲ 0.17 (2.86%)
PRL 18.06 Increased By ▲ 0.16 (0.89%)
PTC 7.08 Increased By ▲ 0.11 (1.58%)
SILK 1.19 Increased By ▲ 0.02 (1.71%)
SNGP 34.75 Increased By ▲ 0.47 (1.37%)
TELE 10.94 Increased By ▲ 0.13 (1.2%)
TPL 9.40 Increased By ▲ 0.32 (3.52%)
TPLP 20.49 Increased By ▲ 0.34 (1.69%)
TREET 29.40 Increased By ▲ 0.25 (0.86%)
TRG 77.50 Increased By ▲ 0.39 (0.51%)
UNITY 20.36 Increased By ▲ 0.31 (1.55%)
WAVES 12.80 No Change ▼ 0.00 (0%)
WTL 1.37 Increased By ▲ 0.04 (3.01%)
YOUW 5.51 Increased By ▲ 0.52 (10.42%)
BR100 4,117 Increased By 16.2 (0.39%)
BR30 15,069 Increased By 42.6 (0.28%)
KSE100 41,630 Increased By 89.5 (0.22%)
KSE30 15,861 Increased By 56.2 (0.36%)
Business & Finance

IMF will link release of funds to increase in income taxes, subsidy removal: Shaukat Tarin

  • Talks between Pakistan and IMF on stalled Extended Fund Facility likely to be held from May 18
Updated 09 May, 2022

Former finance minister Shaukat Tarin said on Monday that the International Monetary Fund (IMF) will link the release of funds to fulfilling prior conditions including the removal of exemptions and subsidies on various items and increase in income taxes.

Pakistan and the IMF are currently engaged in reviving the stalled Extended Fund Facility (EFF) with various items on the agenda including the hotly-debated fuel subsidy. Revival of the programme is crucial for Islamabad that has seen its central-bank-held foreign exchange reserves drop to under two months of import cover.

Taking to Twitter, Tarin said that the international lender would link the tranche release – roughly amounting to $900 million – to the removal of subsidies on petroleum, power, fertilisers, pesticides and provident funds, whereas the income tax would need to be increased for the salaried group as well.

“We had these postponed till next fiscal,” said Tarin, adding that help from allies including China and Saudi Arabia is also being linked to these conditions.

Talks between Pakistan and IMF are likely to be held from May 18, 2022, with uncertainty gripping domestic markets over Islamabad's willingness to meet the different conditions.

While many experts believe that the country will have to meet IMF requirements, with removal fuel subsidy being top of the list, the weak coalition government and its inability to take tough decisions so far have unleased a wave of uncertainty. The situation has also put a spanner in other sources of foreign exchange inflow.

Last week, Finance Minister Miftah Ismail said that in May alone the government will bear losses of Rs102 billion on account of fuel subsidies. While Pakistan has seemingly agreed with the IMF to raise petroleum rates, the finance minister did hint at providing targeted subsidies to minimise the impact on inflation.

KSE-100 plummets nearly 3.4% in intra-day trading as selling pressure remains

The South Asian country has also seen a massive decline in its foreign exchange reserves in recent months owing to imports and debt payments.

Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased another $59 million to $10.5 billion, said the central bank on Friday, with the level staying at less than two months of import cover.

Revival of the programme paves way for a $900-million tranche as well as other sources of funding, with Islamabad also seeking an extension in duration and size of the $6-billion EFF.

Also Read

Time is running out

IMF programme may be crucial, but Pakistan's economic woes run really deep


Comments are closed.

Habib Malik May 09, 2022 05:00pm
It is so disappointing that we are begging for just USD 900 million, while there are billions of dollars of Pakistani two top families in Swiss Bsnks and in others countries. I urge all those who have excessive amounts abroad to bring back the money voluntarily before it is too late even for them.
thumb_up Recommended (0)
Tariq May 09, 2022 05:16pm
Sir bad news we already bankrupt.
thumb_up Recommended (0)