The IMF and Pakistani authorities are scheduled to hold talks for another week. Pakistan has previously asked the IMF to extend the bailout programmed for another year and increase the loan program’s size from $6 billion to $8 billion dollars. Pakistan committed to stop paying unfunded subsidies.
The IMF resident representative, on the other hand, stayed mum on moving the stalled talks from Islamabad to Qatar.
former Finance Minister Ishaq Dar is expected to be in Qatar next week when the Pakistani team begins technical and policy-level negotiations with the IMF.
Previous Finance Minister Miftah Ismail and top finance ministry officials are receiving strategic counsel from the former Finance Minister.
Dar recently indicated in an interview that instead of requesting an extension to the present loan package, his government renegotiate the loan deal with the IMF.
Both sides are anticipated to debate ideas for the next budget for the next fiscal year. The IMF will also encourage Pakistan to increase its tax collection target for the upcoming fiscal year to Rs. 7.25 trillion, up from Rs. 6.1 trillion for the current fiscal year.
To meet the increased revenue target, the government will have to levy additional taxes worth at least Rs. 300 billion. The personal income tax slabs may also be altered. There’s also a proposal to phase out tax breaks for other industries, such as tractors and urea.
FM Miftah Ismail, on the other hand, requested the IMF to extend the EFF programmed for another year and increase the total loan amount to $8 billion from $6 billion during his visit to the US last month, which was welcomed by the IMF, which stated in a press release that this is a signal of Pakistan’s commitment to address existing challenges and meet programmed objectives.
According to sources, PMLN leader Nawaz Sharif reportedly urged his younger brother, Pakistan’s Prime Minister, to seek IMF assistance owing to the country’s poor economic circumstances.
The IMF has asked the Pakistani government to stop the amnesty scheme for the industrial sector and withdraw untargeted subsidies offered by former Prime Minister Imran Khan by raising gasoline prices.
The US dollar soared beyond Rs193 in the interbank market last week, while SBP reserves fell by $190 million to $ 10,308.7 million due to external debt repayments during the week of May 6, 2022.
Saudi Arabia has also linked fresh contributions to SBP with the reopening of the IMF’s stalled rescue programmed, according to previous reports.
Pakistan had recently requested an additional deposit and oil financing facility from Saudi Arabia during PM Shehbaz Sharif’s visit, but a statement issued after the visit said the two countries would discuss the possibility of extending the term of the Kingdom’s $3 billion deposit in Pakistan’s central bank “or through other options.”