Print Print 2023-07-04

Govt’s LoI to IMF contains 9 major assurances

  • Pakistan assures that no new tax amnesty would be granted during the next nine months
Published July 4, 2023

ISLAMABAD: Pakistan has reportedly sent a Letter of Intent (LoI) to the International Monetary Fund (IMF) containing nine major assurances following the staff-level agreement on a nine-month $3 billion stand-by arrangement (SBA).

Official sources in the Finance Division revealed Pakistan has sent the LoI – signed by Finance Minister Ishaq Dar and State Bank Governor Jameel Ahmed – including the assurance that no new tax amnesty would be granted during the next nine months.

The assurances to the IMF included no amnesty scheme will be offered during nine months, tax revenues will be increased, government to implement financial discipline, energy reforms will also be implemented, the exchange rate to be determined by the market, trade restrictions will be lifted, government to implement assurances given to lending countries and institutions, measures will be taken to increase foreign exchange reserves, and reforms will be introduced in state institutions.

PM Shehbaz hails IMF’s $3bn stand-by arrangement with Pakistan

After the approval of the IMF board, Pakistan will get the instalment of $1.1 billion within three to four days.

The IMF and Pakistan have reached $3 billion nine-month SBA, after the country failed to complete yet another IMF Extended Fund Facility (EFF) programme of 6.5 billion dollars, which ended on June 30, 2023, unsuccessfully.

The new staff-level agreement is subject to approval by the IMF Executive Board, with its consideration expected on 12th July 2023.

The IMF Executive Board has issued meetings scheduled till 13th July 2023, but Pakistan is not on the agenda.

According to the IMF Executive Board calendar available on its website, the next meetings are scheduled for July 5, 6, 10, 12, and then on 13th 2023; however, Pakistan is not on the agenda though it could be added anytime.

Copyright Business Recorder, 2023

Comments

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Martian Jul 04, 2023 05:44am
It took Sri Lanka 8 months to get the IMF instalment after signing SLA .
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Tulukan Mairandi Jul 04, 2023 08:23am
Please don't forget avoiding funding of jihadis, as one of the 9 points
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Pakistani1 Jul 04, 2023 08:32am
This undertaking by the government-government to implement financial discipline. Does it mean that the size of the cabinet will be substantially reduced, perks of current and retired judiciary, bureaucracy, parliamentarians and armed forces will be reduced?
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Ash Chak Jul 04, 2023 09:06am
Ishaq Dar will sign on anything to avert the pain and ignominy of defaulting. Let’s see how far they are able to stick to the plan. And if all this pain was unavoidable, then why did the GOP not implement them last September? This lack of courage to take bold decisions will ensure that Pakistan remains a client of the IMF for the foreseeable future.
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Ash Chak Jul 04, 2023 09:07am
@Pakistani1, we can only dream.
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Muhammad Tariq Jul 04, 2023 09:51am
Shame on us we begger are feeling happy after getting loans.
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Tulukkan Mairandi(Salem) Jul 04, 2023 10:37am
Car would PRINT THE DOLLARS
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Zuhayr Jul 04, 2023 11:19am
@Pakistani1, ha ha ha =(
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Wajiha hameed Jul 04, 2023 11:44am
Wajiha hameed
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Wajiha hameed Jul 04, 2023 11:44am
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M yasin mughal Jul 04, 2023 11:48am
Economic condition will not improve until govt. Is controlled. Financial Grant's recently approved by parliaments on submission of an agenda involved billions of rupees burden on Pakistan exchequer. In addition free grants available to high 0fficials and parliaments runs in billions of rupees. I do not consider these expenditure appropriate for our country. In addition and most important factors is to increase export and curtail imports in order to improve balance of payment
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Rebirth Jul 04, 2023 12:03pm
All of these conditions seem sensible. Increasing tax revenue shouldn’t mean increasing the tax burden but rather the tax base. The tax amnesty does mean that the tax burden will be more evenly spread across all socioeconomic classes. Although, this tax amnesty is usually for white collar criminals, mostly government officials or politicians. Trade restrictions can’t be lifted in a way that harms our local economy. Trump used tariffs and Biden didn’t lift them. Must be for a reason. Of course, promoting competition to improve the quality of our domestic products is important but if we have any products that can be compared to foreign imported goods, or are equally good if not better, then there’s no harm in selective tariffs. Asking the government to be more fiscally responsible seems to be the most important criteria. Reforming state institutions, possibly means state-owned enterprises. Governments can’t run businesses or corporations especially not those in a parliamentary democracy.
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Aamir Latif Jul 04, 2023 02:04pm
With fiscal discipline, why was salaries of govt employees increased by 35%, recently perks of senate chairman etc and lately SC judges... With precarious financial conditions of GoP, such throwing away money on salaries is not understood despite high inflation. Wjy did presudent go to Hajj with his third generation of family plus officials at state expense.. GoP just bluff as usual to bring reforms and financial discipline, they have no desire nor will as every one in government is hell bent to avail maximum at state expense.... Yet taxes direct or indirect and utilities sky rocket
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Tulukan Mairandi Jul 04, 2023 02:37pm
Every morning the schools around my house, including girls school, plays Jihad Nasheed for 3 hours for the students. This must stop if we are to grow.
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Fazeel Siddiqui (Overseas Pakistani) Jul 04, 2023 02:45pm
Expect nothing of these really needed measures will be implemented in true spirit. Funny thing, IMF knows it.
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Builder Jul 04, 2023 05:03pm
Looks like @Tulukan Mairandi gone mad. Needs a psychiatrist along with rest of the Indian warriors - the blow to their emotions is really strong!
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Ehsan Jul 04, 2023 07:51pm
@M yasin mughal, imports are practically not taking place as banks are not readily opening LC s except for few sectors like oil, pharmaceuticals and national importance. Imports are Mon existent.
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