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Pakistan

Policy level talks begin with IMF mission

There is also the possibility of introducing a new slab for the power sector. The decision of bringing in addi
10 Feb 2020
  • There is also the possibility of introducing a new slab for the power sector.
  • The decision of bringing in additional taxes of Rs300 billion or presenting a mini budget will be made during the policy level talks as well.

After the conclusion of talks on technical level, Pakistan will begin policy level negotiations with the International Monetary Fund (IMF) from today (Monday), as Pakistan seeks third installment of $450 million loan.

As per details, the Ministry of Finance will have policy-level talks with the IMF delegation, which will consider proposals including giving more autonomy to regulatory bodies Nepra and OGRA, and policy to achieve goals will also be brought into consideration.

During negotiations the proposal for increase in electricity and gas prices will be discussed. Whereas, there is also the possibility of introducing a new slab for the power sector. The decision of bringing in additional taxes of Rs300 billion or presenting a mini budget will be made during the policy level talks as well.

Reports indicate that the IMF staff mission, during the ongoing second review of the 6 billion dollar loan programme, has expressed concerns at the projected fiscal deficit as a consequence of the estimated Rs387 billion revenue shortfall this year.

Meanwhile, discussions will be held between the Federal Board of Revenue (FBR) and IMF delegation regarding introduction of new taxes and increasing tax rate.

Furthermore, the privatization ministry will provide the IMF delegation details on sales of loss incurring entities. During the technical level talks, the State Bank of Pakistan (SBP) provided data on exchange rate and interest rate to the delegation.

IMF has released SDR 328 million (about $ 452.4 million), bringing total disbursements to SDR 1,044 million (approx $1.45 billion). Meanwhile, Pakistan will receive $450 million if talks succeed this time.