Govt implements revenue measures from Feb 15 to secure $1.2bn IMF tranche early

[MenInG]

The government has caved in to the demand of the International Monetary Fund (IMF) and passed on the burden of Rs80 billion on the salaried class by increasing their tax rates and withdrawing the relief announced hardly three weeks ago.

It has set the minimum income tax rate of 2.5% for those earning up to Rs100,000 a month as well as a maximum of 35% on the monthly income of over Rs1 million, according to the proposed amendments to the Finance Bill 2022.

The coalition government has reversed its two earlier decisions to exempt up to those with earning Rs100,000 a month from income tax and rolled back its move to reduce the highest income tax rate from 35% to 32.5% after the IMF refused to budge on its demand.

On June 10, Finance Minister Miftah Ismail had announced an income tax relief of Rs47 billion for the salaried class.

The coalition government has not only withdrawn the relief but also imposed Rs33 billion in net additional taxes in comparison with June 2021 for the salaried class, throwing a burden of Rs80 billion on them.

Also read: PM Shehbaz announces 10pc 'super tax' on large-scale industries

The IMF had proposed to tax the upper middle and rich income groups, which earn in the range of Rs104,000 to Rs1 million a month at a single rate of 30%, which the government did not accept.

The new rates are still lower than the initial demand that the IMF had put before the last government of the PTI.

The IMF had demanded an unjustified rate of 30% to be charged from persons earning Rs100,000 to Rs1 million a month to collect an additional Rs125 billion from the salaried class.

“We tried to get maximum concessions from the IMF for the salaried class but it did not completely accept our position,” Miftah told The Express Tribune. He added that the net additional impact on the salaried class was Rs33 billion a year.

About 1.24 million salaried people have filed income tax returns for the tax year 2021. Of them, 333,000 fall in the income tax exemption slab of Rs50,000 per month. This slab is still exempted.

The government has now proposed a 2.5% income tax rate on up to Rs100,000 monthly income as against nil tax proposed on June 10. This is still half of the rate the salaried class paid in the outgoing fiscal year.

The government has proposed a 12.5% income tax rate for people earning up to Rs200,000 a month –which is 78% higher than that proposed on June 10. The finance minister had earlier vowed that he would not put an additional burden on those with a Rs200,000 monthly income.

For the outgoing fiscal year, the salaried persons were paying 10% for up to Rs150,000 monthly income and 15% on up to Rs208,000 monthly income.

For the fourth slab carrying people of up to Rs300,000 monthly income, the government has now set 20% income tax rate as against 12.5% proposed on June 10 -- an additional burden of 60% in comparison with the three-week old rate. The existing tax rate for this income group was 17.5%.

Last month, inflation in Pakistan stood at 13.8%, which is expected to spiral due to many taxation measures like the Rs50 per litre petroleum levy.

On a monthly income of Rs500,000 -- the fifth slab -- the government has proposed 25% income tax as against the three-week old rate of 17.5%.

For people earning over Rs1 million a month, the government has proposed a 32.5% rate -- up from 22.5% from three weeks ago. For the outgoing fiscal year, the tax rate for this slab was 25%. However, the IMF had proposed a 35% rate for them earlier.

There are over 6,000 individuals, who earn up to Rs1 million a month.

For those who earn over Rs1 million a month, the government has now proposed a 35% income tax rate -- up from the three-week old rate of 32.5%. The finance minister said in the country, there were hardly 12,000 people, who had declared a monthly income of over Rs1 million.

At present, people earning over Rs1 million a month to Rs2.5 million were paying 27.5% income tax rate.

The revision in tax rates for the salaried class is expected to bring Pakistan and the IMF more closely to each other.

However, the IMF has not yet shared the draft of the Memorandum for Economic and Financial Policies (MEFP).

The government expects to receive the MEFP document either on Friday night or Monday.

 

[MenInG]

The government on Friday announced to impose Rs200 billion in additional taxes on the richest persons and the salaried class, taking the total new taxation to a record over Rs1 trillion introduced in the budget aimed at securing a deal with the International Monetary Fund (IMF).

In his budget windup speech, Finance Minister Miftah Ismail announced to impose from 1-10% ‘one-time super tax’ on the big firms to collect an additional Rs80 billion from them.

Minutes before the finance minister’s speech, Prime Minister Shehbaz Sharif while explaining the rationale behind the aggressive measures in a pre-recorded address to the nation said it was a transformational effort to make the richest pay their share so as to cushion the shock of recent austerity measures to the poor.

The prime minister added three more sectors to the list of industries that would be subject to 10% super tax, taking the number from 10 sectors to 13.

However, the stock market bulls blasted off minutes after the premier’s announcement of the super tax and immediately crashed by losing 2,053 points or 4.8% of the value. Subsequently, the losses were reduced to 1,666 points.

The PM said that the government was faced with two options when it first came to power: call fresh elections or take tough decisions and tackle the sinking economy. “It would have been very easy to leave the public in crisis and become silent spectators like others.”

The finance minister also proposed a 1-4% one-time additional “poverty alleviation tax” on people and firms earning from Rs150 million to over Rs300 million a year for the sake of another Rs80 billion. The total impact of the 1% to 4% additional measure will be Rs120 billion but the government has already proposed a 2% tax for those earning over Rs300 million a year to generate Rs40 billion next year.

The companies falling in this bracket would either pay poverty alleviation tax or the super tax, except those 13 sectors, explained the finance minister. To a question, the minister elaborated that the companies that fall under the turnover tax regime, such as the export-oriented firms, will also pay the super tax based on their profit and losses statement.

The government has also revised the salaried class income tax rates. It withdrew the Rs47 billion relief announced in the budget and instead upward revised the rates to collect additional Rs33 billion from the salaried persons.

On June 10, Ismail had proposed Rs740 billion in additional taxes, including Rs300 billion to be generated through the single largest measure – an increase in petroleum levy rate from Rs30 to Rs50 per litre.

The government had estimated a total of Rs750 billion earning from the petroleum levy – a figure that has now been jacked up in the range of Rs825 billion to Rs850 billion in light of an understanding reached with the IMF.

Highest taxation in a single year

After the fresh announcement, the government is going to impose a minimum of over Rs1 trillion in additional taxes on the people and companies for the fiscal year 2022-23 –the highest taxation in a single year. The coalition government has beaten the PTI government’s record of Rs735 billion in taxation measures through the fiscal year 2018-19 budget.

READ PSX plunges by over 2,000 points after PM Shehbaz announces 'super tax'

Out of over Rs1 billion, the share of the direct taxes is Rs509 billion or slightly over half. The government has taken these measures to secure a staff-level agreement with the IMF that has asked Pakistan to present a primary surplus budget.

The finance minister explained that in order to meet this condition, the government has increased the tax collection target for the Federal Board of Revenue (FBR) to Rs7.470 trillion.

The minister added that the non-tax revenue target has slightly been downward revised to Rs1.935 trillion –a reduction of Rs65 billion compared with the June 10 budget. It has still retained the Rs30 billion collection target from the Gas Infrastructure Development Cess, as against the earlier proposed figure of Rs200 billion.

The IMF had objected to the inclusion of the GIDC collection target in the budget.
The share of the provinces in the federal taxes will increase from an earlier announced figure of Rs4.1 trillion to Rs4.37 trillion, said the finance minister.

The federal budget deficit target has been set at Rs4.55 trillion or 5.8% of the GDP. The overall budget deficit target is now Rs3.8 trillion or 4.8% of the GDP, according to the finance minister.

Ismail also said that in order to collect tax from the rich, the government has proposed to impose from 1% to 4% super tax on all firms, increasing their total rate to 33%.

He said that the government has also picked 13 sectors that made windfall gains and it has decided to impose a 10% super tax on them for one year, taking their total income tax rate to 39%.

He said that large-scale industries have been targeted to shore up revenues for supporting the country's poor amid rising inflation.

The government has imposed a 10% super tax on banks, cement, iron & steel, sugar, oil and gas, fertilizers, LNG terminals, textile, banking, automobile, cigarettes, beverages, chemicals and airlines, the finance minister added.

‘Hard to believe promises’

Meanwhile, the Pakistan Business Council cast suspicions on the finance minister's promises and took to Twitter to say: “Based on the past history, here are some hard to believe promises made now in the budget: this is a one-time tax, tax refunds will be made promptly."

The finance minister said that high-net-worth individuals will also be subject to a “poverty alleviation tax”, to be charged at the rate of 1% to 4%.

Those whose annual income exceeds Rs150 million will be subject to 1% tax; for Rs200 million, 2%, Rs250 million 3%; and Rs300 million will be taxed at 4% of their income.

PM Shehbaz vowed to collect due taxes from the people. “The teams have been formed to go all out to collect taxes and assistance will be sought from all constitutional institutions,” the premier said.

Meanwhile, finance minister Ismail said that fixed income tax has also been introduced for jewellers, builders, restaurants and automobile dealers.

The jewellers doing business in less than 300 square feet shop will pay Rs40,000 fixed income tax, those having bigger sized shops will pay 3% sales tax as against the current 17% rate, he added. In the budget, the government has already announced to charge Rs3,000 to Rs10,000 fixed per month income tax from the retailers.

He also restored a 50% capital gains tax exemption for the war-wounded and families of the martyred soldiers and bureaucrats.

Minister for Water Resources Syed Khursheed Shah urged the Finance Minister to increase the tax burden of the tobacco sector.

The cabinet members appreciated the efforts put by the Finance Minister to avert default.

The finance minister said that during the outgoing fiscal year the federal budget deficit will be Rs5.31 trillion and the overall deficit will be Rs4.7 trillion. He criticised the former premier Imran Khan for increasing the debt of the country to nearly Rs45 trillion during his term.

Express Tribune

 

[Varun]

Where is the jazba gone?

Are Pakistanis resigned to their fate? The balloon has deflated over the past month.

Bajwa - 1. Awaam - 0.

 

[cricketjoshila]

This and the taxes on industry and super rich is aimed at bridging the budget deficit.

IMF isn't going to bailout pakistan unless Pakistan goes into a financial discipline mode. And without IMF pakistan has high chances of a debt default.

 

[mazkhan]

They didn't cave in this goverment that has been imposed has been directly imposed by the west and imf the pdm are western agents.

They are basically doing a hit job on pakistan and will strip and suck the blood dry of pakistan and till it will cease to be a viable state.


I have no doubt the globalists and zionists elite want a world war They are deliberately setting up various confontrations around the world to cause ww3 which is their plan for mass destruction and wipe out the majority of the world's population through war , nuclear fallout and food shortages and famine


Russia itself has been goaded into and they will eventually cause a massive war in Europe with Russia. The kalingrad episode is clear example alongside the British army chief who is on record has called the military to prepare to fight Russia if that isn't a call to ww3 and a massive war on the continent which will drag in the rest of the world then I don't know what is .

 

[Savak]

Lifafa media would have launched their machine guns non stop if this was the output of the pti govt. It is very telling to see the silence of Najam Sethi, Asma Shirazi, Ghareeda Farooq, Saleem Saifi, Mansoor Ali Khan, Hamid Mir, Sana Bucha and Co.

The badniyati of these kind of people towards their mother land is what makes people want to leave the country permanently.

 

[hoshiarpurexpress]

Where is the jazba gone?

Are Pakistanis resigned to their fate? The balloon has deflated over the past month.

Bajwa - 1. Awaam - 0.

The Jazba deflates as they know a black vigo will come to pick them up in case they speak against neutrals

 

[sjahmed23]

Pakistan needs to tax the landlords and land owners. The highest income is made by those who own property yet there is no tax imposed on them???

Rich people in Pakistan just want to buy property to get rich without doing any hardwork or taking any risk. Poor people are being duped by these elites who are all in it together. Army, imran khan, zardari, nawaz sharif all work for the elites and willing to protect them at any costs. Radical changes needed for Pakistan to get rid of these rent seeking elites so capital can be put to work in value added industries and not more plots in Bahria.

 

[Bewal Express]

The Jazba deflates as they know a black vigo will come to pick them up in case they speak against neutrals

I am in the camp that has resigned to our fate. When the defenders of the country impose criminals, then you know that the game is up. Now and then I get angry but it's pointless and makes no difference.

 

[Gharib Aadmi]

Where is the jazba gone?

Are Pakistanis resigned to their fate? The balloon has deflated over the past month.

Bajwa - 1. Awaam - 0.

What can the people do? They are not happy, however its really hot right now. Its not realistic for them to stay on the streets.

Best course of action is to wait until the next election which at latest will be October of 2023. IK should go into parliament and become the leader of Opposition.

 

[daytrader]

What can the people do? They are not happy, however its really hot right now. Its not realistic for them to stay on the streets.

Best course of action is to wait until the next election which at latest will be October of 2023. IK should go into parliament and become the leader of Opposition.

According to a recent survey by Gallup Pakistan 69% want immediate elections rather than having this government complete its illegitimate tenure. The people have spoken but are powerless to force change

 

[Gharib Aadmi]

According to a recent survey by Gallup Pakistan 69% want immediate elections rather than having this government complete its illegitimate tenure. The people have spoken but are powerless to force change

That same Gallup poll also said majority (57%) were happy with IK's departure. And the reason they gave was inflation. So IK should not feel too bad about losing the no confidence vote. When elections are held he will no longer be blamed for inflation, and he stands a good chance to win.

https://www.gallup.com.pk/post/33101

 

[Varun]

I am in the camp that has resigned to our fate. When the defenders of the country impose criminals, then you know that the game is up. Now and then I get angry but it's pointless and makes no difference.

No offense but after living 0/1332 days in Pakistan during Imran Khan's reign and 1332/1332 days under Boris Johnson instead, you were the last hope to effect change.

This is a task for real Pakistanis who have skin in the game.

 

[NishanKonar]

No offense but after living 0/1332 days in Pakistan during Imran Khan's reign and 1332/1332 days under Boris Johnson instead, you were the last hope to effect change.

This is a task for real Pakistanis who have skin in the game.

Real change happens on the streets. Not on twitter and social media

Look at farm protests in India. They spent 1 year on the streets. Battled the police, paramilitary and weather. But never gave up. Forced Modi to cave in to their demands

Meanwhile in Pakistan they gave up after a few weeks. Tells you how much " jazba" they actually had in real life

I think Imran Khan supporters should learn some lessons from the Sikhs and Jats of India

 

[hoshiarpurexpress]

I am in the camp that has resigned to our fate. When the defenders of the country impose criminals, then you know that the game is up. Now and then I get angry but it's pointless and makes no difference.

The Army has overreached its might in Pakistan, as always Good or bad.. The Indian leadership would also like to deal with civilians. There is some chance then, of some peace. But forget about India, at the end, It will be good for long term future of Pakistan itself.

 

[hoshiarpurexpress]

What can the people do? They are not happy, however its really hot right now. Its not realistic for them to stay on the streets.

Best course of action is to wait until the next election which at latest will be October of 2023. IK should go into parliament and become the leader of Opposition.

Protest on the road to take their country back and do not give up.
The election, most probably, will be rigged again.

 

[MenInG]

Former federal ministers Shaukat Tarin and Asad Umar on Sunday lashed out at the incumbent government for its “regressive” economic measures.

Slamming the government for hiking taxes, Tarin, who was the finance minister in the previous government, advised it to follow the previous taxation regime introduced by the Pakistan Tehreek-e-Insaf (PTI) government and to generate additional revenue by broadening the tax base, enforcing tax collection through points of sale (POS), automating the supply chain, using the track and trace system, and pursuing single-window operations.

“Why are you not pursuing our five programmes of broadening, using POS, supply chain automation, track and trace and single window to increase taxes. We added Rs1.4tr revenue this year and would have added Rs1.9tr in 2023 without crippling new taxes,” he tweeted.

On the other hand, Umar, the former planning minister, tweeted that the country made rapid progress in IT exports during the last two years of PTI’s rule. But, he lamented, the “regressive measures” in the new budget were threatening this growth.

“One of the most exciting things in last couple of years was rapid increase in IT exports. This industry can revolutionise Pak economy. We had made plans for massive investment in training people in tech skills. Regressive measures in the new budget are threatening this growth,” he wrote.

In another tweet, he said that the “incompetent” and “imported government” was struggling to handle the energy supply chain. He said that a massive shortfall was expected in the next few weeks due to the government’s inability to procure liquified natural gas (LNG).

“Remarkable how many different ways they are damaging the economy in such a short period of time,” he added. (With input from DNA)


https://tribune.com.pk/story/2363490/pti-lashes-out-at-govt-for-regressive-economic-measures

 

[MenInG]

The International Monetary Fund (IMF) and Pakistan moved closer to the revival of their loan package on Saturday as Islamabad has taken several steps to reduce its expenditure, increase energy prices and improve tax collection, as demanded by the IMF.

The moves bring Pakistan closer to meeting an IMF demand that the country achieve a primary budget surplus of 153 billion rupees — 0.2 per cent of the national output for the new financial year — to revive the bailout package.

After the last round of talks, IMF Resident Repres*entative in Islamabad Esther Perez Ruiz said, “Discussions between the IMF staff and the authorities on policies to strengthen macroeconomic stability in the coming year continue, and important progress has been made over the FY23 budget”.

Since then, Pakistan has taken other key steps to IMF demands.

But Michael Kugelman, a scholar of South Asian affairs at the Wilson Centre, Washington, thinks that the Fund wants more.

“My sense is that the IMF wants to get a better sense of Islamabad’s commitment to meeting IMF criteria before agreeing to release more funds,” he said.

He said the new government started off “slowly and indecisively,” refusing to remove the energy subsidy that the IMF wanted gone and this proved costly in the previous round of talks.

“To its credit, the (Shehbaz) Sharif government is now doing all the right things, through the release of its austerity budget and other revenue-generating moves. So, the IMF funds should start coming in,” he added.

The Bloomberg financial wire also agrees with this assessment, saying that “Pakistan is probably closer to an IMF loan”.

Published in Dawn, July 10th, 2022

 

[Colorblind Genius]

The IMF knows it with 110% surety that loaned money is never going to be returned by these seasoned crooks.

IMF also knows that a big chunk of these dollars will be looted and hogged on like pigs by these PDM/PPP politicians.

IMF is simply making sure the country itself and our coming generations are fully chained for decades and centuries, and act like IMF slaves.

And these PDM crooks are making sure it happens.
No one is going to be able repay this loan, and the country n its assets will simply burry even more under this astronomical debt. But who cares?

 

[MenInG]

The government is considering giving about Rs60 billion in tax relief to bankers, stock market brokers, traders and transporters amid its attempts to pacify the International Monetary Fund (IMF) by imposing equal amounts of taxes on other sectors to keep the loan programme on track.

The government disclosed its intentions to give relief to the powerful sectors the day the global lender handed over draft of the letter of intent (LoI) -- a promissory document that is required to be signed by the finance minister and the governor of the State Bank about their commitments to keep the programme afloat.

The finance ministry was reviewing the draft and its signing by them would pave the way for calling the board meeting, likely on August 29.

Pakistan has committed with the IMF that it would generate a primary budget surplus of Rs153 billion in this fiscal year to achieve the global lender’s programme objectives.

However, sources said that in the middle of convincing the IMF about its intentions to implement fiscally prudent policies, the government was going to create a big hole of around Rs230 billion, including Rs60 billion that it wanted to give away in tax relief.

They added that during Thursday’s meeting between Pakistan and the IMF authorities, the latter had raised concerns about giving tax relief to these sectors. They added that Finance Minister Miftah Ismail had assured the IMF that the relief would be “tax neutral” -- an expression used to tax imports and cigarettes to raise money to fund the wealthy bankers and stock market brokers.

After the approval of the budget, the government has given about Rs84 billion in additional subsidies to exporters -- over and above the money kept in the budget.

The Economic Coordination Committee (ECC) of the cabinet is also sitting on the Rs54 billion pending subsidy demand by the Utility Stores Corporation (USC) to fund the subsidised food.

The ECC has already approved Rs30 billion additional budget for the PSO subsidy.

Read Govt plans Rs40b new taxes to appease IMF

In the middle of the economic crisis, the government is going to give massive tax relief of billions of rupees to these sectors through a presidential ordinance.

The banks might receive at least Rs10 billion to Rs12 billion in income tax relief, as the government is planning to reduce its tax rates on profits earned by giving loans to the Centre, said the sources.

They added that Prime Minister Shehbaz Sharif had not yet given consent to give relief to the stock market.

Through the Finance Act, 2021, for tax year 2022 onwards, higher rates of tax were prescribed for the banking companies in respect of the taxable income attributable to investment in the federal government securities.

To encourage banks to the private sector, the government had linked the tax rates with the banks’ advances to deposits ratio (ADR).

For up to 40% ADR, the government had increased the income tax rate from 40% to 55% in the budget.

The FBR was considering reducing this rate back to 40% for the tax year 2022 and then set it at 50% for the tax year 2023, according to the sources.

Similarly, for the ADR of above 40% to 50%, the government in this year’s budget had increased the tax rate from 37.5% to 49%.

The sources added that now there was a proposal that the rate should be reverted back to 37.5% for tax year 2022 and set at 45% for the tax year 2023.

In the budget, the standard rate of tax for banking companies was revised at 39% for the tax year 2023 and onwards. The super tax rate was also enhanced to 10% for tax year 2023.

The sources said the government was planning to give another tax relief of nearly Rs5 billion to the stock market.

The government had already given Rs8 billion to Rs10 billion relief in income tax to the stock market by lowering the capital gains tax rates on sale of shares after holding them for two years. It had also completely abolished the tax by the sixth year in the budget.

In the recent budget, this relief has been restricted only to those disposal of shares acquired on or after July 1, 2022.

Read more IMF toughens stance on loan tranche release

For shares purchased before July 2022, the old fixed tax rate of 12.5% had been retained.

However, the sources said the government was considering that the shares purchased before July 1, 2022 should also be charged on the reduced income tax rates. This will provide around Rs5 billion income tax relief.

In the budget, the government had increased the fixed income tax rate for transporters.

The advance tax on passenger transport vehicles has been increased in the range of Rs1,000 to Rs4,000 per seat.

The finance minister has already announced reducing the maximum per seat rate to Rs1,500.

This will cause about Rs2 billion hit to the revenues, according to the sources.

The government has already announced withdrawing the fixed tax regime for the traders. This will cause a Rs42 billion dent in the revenues.

However, the finance minister said that the government would collect Rs27 billion from the traders in this fiscal year by enhancing the previous tax regime rates.

The Rs15 billion gap would be filled by increasing taxes on other sectors, he added.

The finance minister further stated that the relief in taxes would be compensated by increasing taxes on tobacco, cigarettes, and increasing duties on certain imported goods.

https://tribune.com.pk/story/2370938/imf-shares-loi-with-govt-to-seal-loan-deal

 

[AamchiMumbaikar]

Have to say these tax rates are still better than India. Here goverment loots everyone earning > 85,000 inr per month. Which is approx 233,000 PKR per month

 

[MenInG]

ISLAMABAD: The government has given an undertaking to the International Monetary Fund (IMF) to raise the petroleum development levy (PDL) to a maximum of Rs50 per litre each on petrol and diesel by January and April, respectively, in 2023.

In its Letter of Intent (LoI) sent to the IMF for formal approval of completion of the 7th and 8th reviews of the $7bn Extended Fund Facility (EFF), Pakistan has also made iron-clad commitments to build foreign exchange reserves to cover at least 10 weeks of imports by end of the current fiscal year from existing 5 weeks and not to use those reserves ever to support the exchange rate.

IMF Country Representatives Esther Perez Ruiz on Wednesday announced that the Fund’s Executive Board meeting for Pakistan’s combined seventh and eighth reviews under the EFF has been scheduled for Aug 29.

https://www.dawn.com/news/1705466/govt-commits-more-taxes-as-imf-board-meets-on-29th

 

[daytrader]

No other option but to implement IMF deal: PM
Shehbaz urges fast-tack solarisation of govt buildings

Prime Minister Shehbaz Sharif on Tuesday said the government had “no other option” but to implement the International Monetary Fund (IMF) programme.

He regretted that if they wanted to give any subsidy in any sector, they had to go to the IMF, 'which is a factor and a painful reality'.

He said the coalition government never wanted to transfer the burden of price hikes. In the past, the PTI government blatantly breached the agreement with the International Monetary Fund (IMF).

Meanwhile, the prime minister said that they had devised a plan to immediately convert all the federal government entities’ buildings to solar power by April next year in order to slash a huge chunk out of the country’s costly fuel import bill hovering around $27 billion.

...
https://tribune.com.pk/story/2393066/no-other-option-but-to-implement-imf-deal-pm

 

[MenInG]

The International Monetary Fund (IMF) on Sunday said that a call between Managing Director Kristalina Georgieva and Prime Minister Shehbaz Sharif took place on the request of the PM - a statement that indicates Islamabad has not refrained from doing politics despite nearing default.

“The call took place in response to a request by the Prime Minister of Pakistan to discuss the International Conference on resilient Pakistan,” Esther Perez, the resident representative of the IMF confirmed to The Express Tribune.

It is pertinent to note that on Friday an official handout released by the PM’s Office after his speech at the Hazara Electric Supply Company (HAZECO)'s inauguration ceremony had read that “the IMF managing director called premier Shehbaz on the phone.”

 

[Romali_rotti]

I am in the camp that has resigned to our fate. When the defenders of the country impose criminals, then you know that the game is up. Now and then I get angry but it's pointless and makes no difference.

I have been saying this for a long time, Pakistan is a lost cause..

The fact we have a thread on this message board discussing whether the Blasphemy law should be abolished or not pretty much tells the picture of Pakistan's fate. In the 20th century if you want to prosper you don't have silly discussions like this, Blasphemy should be BANNED, heck it should have never been implemented in Pakistan.

Add to the fact that the military and its generals will always control the economy, it does not matter who is power, be it Imran Khan, Bilwal little boi Bhutto or whoever else, your fate is sealed, Pakistan will never get anywhere.

Pakistan's existence till the end of time will be a country; that is broke, that no one in the international scene takes seriously and either be owned by the Americans or the Chinese depending on the political climate.

This post is not meant to be condescending but speaking what I am seeing. Sure we will have a few proud Pakistanis who may come out and say that I am wrong and Pakistan will see light at the end of the tunnel. All that is just wishful thinking, I have had Pakistanis on here say the same thing 10 years ago when I made similar views and they were wrong and I was right.

Its Coffin, Nail, Hammer as far as Pakistan is concerned, it's too late just accept reality and live the way Pakistan is till the end of time...

 

[MenInG]

A delegation of the International Monetary Fund (IMF) will meet Finance Minister Ishaq Dar on the sidelines of the upcoming Geneva conference to “discuss outstanding issues”, the lender’s spokesperson said on Sunday.

 

[MenInG]

Pakistan and the International Monetary Fund (IMF) did not announce a breakthrough in their talks on Monday as was evident from the fact that no date was announced for the mission’s crucial visit to Islamabad despite both the sides terming their first face-to-face meeting in four months “positive”.

The purpose of the meeting was to reach a consensus on the measures that would ensure the negotiations for the 9th programme review. But surprisingly, the finance ministry tweeted that Finance Minister Ishaq Dar and IMF Mission Chief Nathan Porter “discussed challenges to regional economies in the wake of climate change”.

Express Tribune

 

[daytrader]

Loan talks revived after govt bows to IMF diktat
Foreign lender mission to arrive next week

In a major development, the International Monetary Fund (IMF) on Thursday announced sending its mission to Pakistan next week in a bid to break a deadlock over critical conditions regarding plugging a fiscal hole of around Rs2.5 trillion through a combination of taxation, expenditure and power tariff measures.

“At the request of the (Pakistani) authorities, an in-person fund mission is scheduled to visit Islamabad from January 31 to February 9 to continue discussions under the 9th EFF (Extended Fund Facility) Review,” Esther Perez, the Resident Representative of the IMF said.

The much-delayed announcement came hours after Finance Minister Ishaq Dar bowed to let the rupee devalue by Rs25 to a dollar or 9.61% - the highest ever drop in a single day in Pakistan’s history.

The government moved only after the US conveyed in plain words to the government to follow the IMF path instead of seeking political favours while foreign nations, too, excused themselves from giving more lifelines without the IMF umbrella.

“The US sent its deputy assistant treasury secretary to Pakistan to deliver the message,” according to a government source.

...
https://tribune.com.pk/story/2397855/loan-talks-revived-after-govt-bows-to-imf-diktat

 

[MenInG]

Prime Minister Shehbaz Sharif said on Friday that he fully expects an agreement with the International Monetary Fund (IMF) this month, after which other multilateral lenders would also support the country to help mitigate its economic crisis.

“I fully expect that an agreement with the IMF will be signed this month and we will get out of these difficulties. And multilateral institutions will also support us.”

 

[daytrader]

IMF seeks political consensus for revival of $6.5b bailout
Expresses concerns opp may create hurdle in implementation of tough economic decisions

The International Monetary Fund (IMF) on Tuesday expressed concerns that the opposition might create hurdles in the way of implementing tough economic decisions, urging the government to meet all the “requirements” for the completion of the much-delayed programme review.

Nathan Porter, the visiting mission chief of the IMF, raised the question about the implication of the opposition’s role in difficult decisions that Pakistan would have to take to avoid the default.

He expressed these concerns during the opening round of 10-day-long talks, according to the government officials.

Finance Minister Ishaq Dar led the Pakistani delegation.

Sources quoted the IMF mission chief as saying that the fund had concerns that the opposition might create some problems in the way of rolling out additional taxation measures that the government was planning to impose to revive the talks.

The government also started work on a plan for increasing the electricity prices.

...
https://tribune.com.pk/story/2398789/imf-seeks-political-consensus-for-revival-of-65b-bailout

 

[MenInG]

Finance Minister Ishaq Dar said on Thursday that matters between the government and the International Monetary Fund (IMF) related to the completion of the ninth review of a $7 billion loan programme were expected to be settled today.

“Everything is going alright,” he said in response to a question on how the discussions with the visiting IMF delegation were going. “The final round is going on right now. I meet them (IMF team) every day and will today as well.

“It is expected matters will be settled today,” Dar said. “We will give you the news very soon.”

The finance minister was responding to questions from reporters after addressing a road safety conference in Islamabad.

 

[IAJ]

Have to say these tax rates are still better than India. Here goverment loots everyone earning > 85,000 inr per month. Which is approx 233,000 PKR per month

What's the common percent rate of the income salary in India?

 

[Cover Drive Six]

What's the common percent rate of the income salary in India?

Here are the new income tax slabs under the new tax regime for FY2023-24

Up to Rs 3 lakh - 0% tax
Rs 3 to 6 lakh - 5% tax
Rs 6 to 9 lakh - 10% tax
Rs 9 lakh to 12 lakh - 15% tax
Rs 12 lakh to 15 lakh - 20% tax
Rs 15 lakh above - 30% tax

 

[MenInG]

Finance Minister Ishaq Dar said on Friday that the government had received the Memorandum of Economic and Financial Policies (MEFP) from the International Monetary Fund (IMF) related to the completion of the ninth review of a $7 billion loan programme, indicating that a staff-level agreement with the lender was still pending.

DAWN

 

[daytrader]

Shares plunge 568 points as staff-level agreement with IMF delayed

Shares at the Pakistan Stock Exchange (PSX) plunged during intraday trading on Friday as a staff-level agreement with the International Monetary Fund (IMF) for the completion of the ninth review of a $7 billion loan programme was delayed.

The benchmark KSE-100 index lost 568.21 points, or 1.34 per cent, to reach 41,898.38 points when trading was suspended for Friday prayers.

Topline Securities CEO Mohammad Sohail said the market was under pressure because of the delay. “If the delay is extended, the downward trend may continue,” he added.

“The KSE-100 has pared some of this month’s gains in early morning trading due to the delay in securing the staff-level agreement with the IMF,” Intermarket Securities’ Head of Equity Raza Jafri commented.

An IMF delegation, which left Pakistan last night after holding talks with the government for 10 days, issued a statement early today that virtual talks would continue.

In a press conference shortly afterwards, Finance Minister Ishaq Dar said that the government had received the Memorandum of Economic and Financial Policies (MEFP) from the IMF, indicating that a staff-level agreement with the lender was still pending.

“I am confirming that the MEFP draft has been received by us at 9am today,” he said. “We will completely go through the [MEFP] over the weekend and will hold a virtual meeting with [Fund officials]. It will obviously take a few days.”

The MEFP is a key document that describes all the conditions, steps and policy measures on the basis of which the two sides declare the staff-level agreement.

DAWN

 

[IAJ]

Here are the new income tax slabs under the new tax regime for FY2023-24

Up to Rs 3 lakh - 0% tax
Rs 3 to 6 lakh - 5% tax
Rs 6 to 9 lakh - 10% tax
Rs 9 lakh to 12 lakh - 15% tax
Rs 12 lakh to 15 lakh - 20% tax
Rs 15 lakh above - 30% tax

Thanks, that's some heavy taxation, but in the end it will benefit the country, provided there is no corruption and the money are spent where it's necessary.

 

[Major]

I feel bad for all the haters of Pakistan who were hoping for Pakistan to default and fail. Nothing has gone their way since last years april.

 

[the Great Khan]

I feel bad for all the haters of Pakistan who were hoping for Pakistan to default and fail. Nothing has gone their way since last years april.

Nobody wishes that. What we want is political stability and an early election which will lead to economic stability. You want your team to win so you can laugh at the other teams supporters while you both drown.. have you bought your dingy yet?

 

[gazza619]

I reckon if the army takes a 20% cut in wages and perks, that will solve 75% of the country’s debt problems.

 

[the Great Khan]

I reckon if the army takes a 20% cut in wages and perks, that will solve 75% of the country’s debt problems.

The army needs reform from top to bottom but is still the only real public sector organisation that functions in the country. Its way too big and inefficient.

Needs to become more mobile and tech driven..also better educated.

 

[AamchiMumbaikar]

I feel bad for all the haters of Pakistan who were hoping for Pakistan to default and fail. Nothing has gone their way since last years april.

What is going on currently with pak ? Is the economic situation getting better ?

 

[MenInG]

The army needs reform from top to bottom but is still the only real public sector organisation that functions in the country. Its way too big and inefficient.

Needs to become more mobile and tech driven..also better educated.

Bille kee gardan mai ghantee kon bandhay ga?

[Who will take that risk on their heads to criticize the establishment?]

 

[the Great Khan]

Bille kee gardan mai ghantee kon bandhay ga?

[Who will take that risk on their heads to criticize the establishment?]

I have to be honest. Watching the Ukraine war shows us that we may not survive a direct confrontation with hindustan without reform. The PAF and Navy are making great technical strides..but the fauj is bogged down by poor leadership and a need to modernise. Luckilybwe have nukes that equalise things and also give us the option to downsize...duffers don't realise it and are busy trying to run a country..

 

[dildilpak]

I feel bad for all the haters of Pakistan who were hoping for Pakistan to default and fail. Nothing has gone their way since last years april.

What you smoking on, bud? Pakistan needs to repay $22 billion in the next year including $4 billion in the next month. And its present reserves are $3.1 billion which is depleting rapidly as we speak. If this IMF thing doesn’t go through, Pakistan will default this month end. Nobody else is willing to help out Pakistan currently.

 

[Major]

What is going on currently with pak ? Is the economic situation getting better ?

The default would had happened in december, but opinion articles by economic experts and not political tools suggest that Pakistan has gone past this issue. We are not defaulting anymore. you will see posters making such posts here but that is their wishful thinking only.

 

[MenInG]

No default will happen but the economy has been crippled beyond imagination due to the crooks who are running the country.

At this point, Pakistan is running because of good fortune and help from friends.

 

[OneManShow]

The default would had happened in december, but opinion articles by economic experts and not political tools suggest that Pakistan has gone past this issue. We are not defaulting anymore. you will see posters making such posts here but that is their wishful thinking only.

We are not defaulting because we are kicking the can down the road. Nearly half of all income will be used for debt servicing for the foreseeable future. Before long Pak will require another IMF loan. It's a vicious debt circle with no end in sight. With a relatively young population, Pak should not find itself in this position and only does so due to decades of mismanagement- mostly governed by the elite for the elite. If we somehow manage to pivot toward prioritising education and aligning the funding required to do so Pak can salvage in the long term but short to mid term it Will remain bleak. The average pakistani will struggle big time

 

[gazza619]

The army must step in and take a cut. They have to. There is no other choice.

 

[the Great Khan]

What you smoking on, bud? Pakistan needs to repay $22 billion in the next year including $4 billion in the next month. And its present reserves are $3.1 billion which is depleting rapidly as we speak. If this IMF thing doesn’t go through, Pakistan will default this month end. Nobody else is willing to help out Pakistan currently.

Denial. He's broken because he told us this shower was competent.

 

[cricketjoshila]

A default at this stage may not be a bad idea. Devalue currency, increase exports. Reform the economy.

IMF bailout of 7bn isn't going to take this much far.

 

[the Great Khan]

A default at this stage may not be a bad idea. Devalue currency, increase exports. Reform the economy.

IMF bailout of 7bn isn't going to take this much far.

Three months or four..bus..

 

[MenInG]

A default at this stage may not be a bad idea. Devalue currency, increase exports. Reform the economy.

IMF bailout of 7bn isn't going to take this much far.

Credit rating will be destroyed.

 

[JattMaula]

No default will happen but the economy has been crippled beyond imagination due to the crooks who are running the country.

At this point, Pakistan is running because of good fortune and help from friends.

That help is never unconditional. The bill always comes due.

 

[cricketjoshila]

Credit rating will be destroyed.

Better than country getting destroyed.

Pakistan needs basic structural reforms. Bailouts isn't going to solve this issue.

Pakistan is handing out too much leverage to others for these bailouts.

 

[dildilpak]

Credit rating will be destroyed.

As if even with the current rating, creditors are lining up to give money to Pakistan!

And let me tell you this, even if Pakistan manages to get IMF bailout this time that’s only $6.5bln against $22bln owed in a year! With the political instability & low production base Pakistan has, where will it earn the rest from? Who will lend it more money?

Default is inevitable.

 

[GLORY OF '92]

Just for perspective HMRC collected £731 billion in taxes in one year. Long road ahead for Pakistan.

 

[Savak]

Here are the new income tax slabs under the new tax regime for FY2023-24

Up to Rs 3 lakh - 0% tax
Rs 3 to 6 lakh - 5% tax
Rs 6 to 9 lakh - 10% tax
Rs 9 lakh to 12 lakh - 15% tax
Rs 12 lakh to 15 lakh - 20% tax
Rs 15 lakh above - 30% tax

The solution is not to increase taxation on the people already in the system. The solution is to fully document the economy and to bring the traders, retailers and other non filers, tax evaders into the tax net.

 

[MenInG]

In light of an unexpected relief in tax measures from the International Monetary Fund, the government has decided to take a proactive approach and implement tax and non-tax measures from Feb 15 instead of March 1 — the purported deadline proposed by the global lender — to secure quick release of $1.2 billion tranche.

Ahead of the start of much-delayed talks, the government was expecting that the IMF would ask for approximately Rs400 billion in tax and non-tax measures, but as policy-level talks came to a close both sides agreed on Rs170bn collection from tax and non-tax measures in the next four and a half months.

Official sources privy to talks told Dawn that the Federal Board of Revenue (FBR) has already drafted two ordinances to impose Rs100 billion in new taxes and Rs100bn in flood levy on imports. “We were expecting more demands from the Fund in the areas of taxes”, the sources said, adding things have changed in the last two days of policy-level negotiations.

However, the sources did not elaborate on ‘the change of heart’ from the IMF side. The only justification that came was that the Fund might have considered the flood’s effects on the overall economy. Moreover, FBR is getting extra billions from the massive rupee depreciation as well.

Despite floods, the government will have to discontinue the Kissan Package along with power subsidy in the export sector from March 1. As per agreed FBR tax measures, the government will generate around Rs70bn in the next four and half months from raising the general sales tax from 17per cent to 18pc. The collection alone is 41.2pc of the agreed tax and non-tax measures of Rs170bn.

Other tax measures include raising withholding tax rates, increasing tax rates of regulatory duties on imports of luxury and non-essential items and further increase in the federal excise duty on the tobacco sector. “We have already completed our home-work and identified the areas for additional taxation measures”, the sources said.

Finance Minister Ishaq Dar will pick from the basket of proposed tax measures, the sources said, adding there is flexibility now for the finance minister to choose among the sectors as well as rationalise tax rates.

On the non-tax measures side, a flood levy will be imposed. “The levy is discussed with the IMF during the policy level negotiations”, the sources said, adding the rate of levy and its implementation will be decided by the finance minister. The FBR will collect the flood levy for the government at the import stage.

As a policy, according to the sources, IMF did not support tax measures at the import stage. However, the government will push for the levy to implement because its collection will not be shared with the provinces. Under the petroleum development levy (PDL), IMF has already projected a shortfall of over Rs300bn.

The flood levy will be used to bridge the PDL shortfall, the sources said, adding no commitment was made for further increase in the PDL. However, the government will increase Rs5 as PDL on diesel from Feb 15 and another Rs5 per litre from March 1. This will be in addition to the passing of international price impact along with the currency depreciation.

According to sources, the finance minister will decide the quantum share of FBR tax measures and non-tax measures (flood levy) in the total amount of Rs170bn to be collected in the next four months.

Pakistan and IMF technical teams held several rounds of talks for 10 days which ended with an understanding to complete formalities for the staff-level agreement. At the end of the talks, Pakistan received a draft Memorandum of Economic & Fiscal Policies (MEFP).

Further discussions on the draft will start on Monday to fine-tune it. This will be followed by a signing of the letter of intent and the announcement of the staff-level agreement which will be placed before the executive board of the IMF for formal approval.

After the approval of this from the board, Pakistan will receive $1.2bn from the Fund. This will also pave way for the bilateral amount from friendly countries including China awaiting a green signal from the IMF.

Published in Dawn, February 12th, 2023

 

[gazza619]

Just for perspective HMRC collected £731 billion in taxes in one year. Long road ahead for Pakistan.

The key is not only how much tax was collected, it is also where is that collected tax spent.

If every Pakistani Army general is currently taking perks totalling billions of rupees by the time they retire, then that pot would only increase with more tax collection, if you know what I mean.

 

[wasim-fan]

As if even with the current rating, creditors are lining up to give money to Pakistan!

And let me tell you this, even if Pakistan manages to get IMF bailout this time that’s only $6.5bln against $22bln owed in a year! With the political instability & low production base Pakistan has, where will it earn the rest from? Who will lend it more money?

Default is inevitable.

Nailed it.

 

[Colorblind Genius]

Nailed it.

Nailed it?
But Bajwa said he removed IK to save Pakistan. What happened now?
Was he right or wrong to bring this bunch of duffers and crooks to power?

Did Bajwa manage to delay Pakistan’s default by a few months?

 

[wasim-fan]

Nailed it?
But Bajwa said he removed IK to save Pakistan. What happened now?
Was he right or wrong to bring this bunch of duffers and crooks to power?

Did Bajwa manage to delay Pakistan’s default by a few months?

Bajwa cared for Pakistan as much as any average Pakistan general who has post retirement investment in US and UK.

IK was brought by Bajwa and removed by Bajwa. It has little to do with economy just like any other PM. You dont take on the army in Pakistan.

 

[YousafTheBeast]

Bajwa cared for Pakistan as much as any average Pakistan general who has post retirement investment in US and UK.

IK was brought by Bajwa and removed by Bajwa. It has little to do with economy just like any other PM. You dont take on the army in Pakistan.

LOL @ IK brought by Bajwa

If anything, Bajwa prevented IK from getting a majority.

 

[MenInG]

Talks between the International Monetary Fund and Pakistan will resume virtually on Monday, a Pakistani official said, as the two sides look to reach a deal to unlock funding critical to keep the cash-strapped south Asian country afloat.

The two could not reach a deal last week and a visiting IMF delegation departed Islamabad after 10 days of talks, but said negotiations would continue. Pakistan is in dire need of funds as it battles a wrenching economic crisis.

Related video: Pakistan to raise $631 MN in revenue, Finance Minister chairs meeting (WION)
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"Duration (of the talks) cannot be confirmed but we intend to wrap these up at the soonest," Finance Secretary Hamed Yaqoob Sheikh told Reuters in a text message, confirming that talks were resuming on Monday.

Talks centre around reaching an agreement on a reforms agenda under the country's $6.5 bailout programme, which it entered in 2019. An agreement on the ninth review of the programme would release over $1.1 billion.

Pakistan's foreign exchange reserves held by the central bank have fallen to $2.9 billion, barely enough to cover three weeks of imports. A resumption of the IMF programme would also unlock other avenues of funding for Pakistan.

An agreement, if reached, would still need to be cleared by the IMF board.

 

[MenInG]

A long-awaited loan agreement between Pakistan and the International Monetary Fund (IMF) will be signed once a few remaining points, including a proposed fuel pricing scheme, are settled, an IMF official confirmed on Friday.

The coalition government and IMF have been negotiating since early February on an agreement that would release $1.1 billion to the cash-strapped country of 220 million people.

The latest issue is a plan, announced by Prime Minister Shehbaz Sharif last week, to charge affluent consumers more for fuel, with the money raised used to subsidise prices for the poor, who have been hit hard by inflation, which in February was at its highest in 50 years.

 

[MenInG]

Pakistan on Thursday kicked off outsourcing of operations and land assets at three major airports to be run through a public private partnership, a finance ministry statement said, a move to generate foreign exchange reserves for its ailing economy.

Islamabad has engaged the World Bank’s International Finance Corporation as an adviser for the outsourcing process, the ministry said in the statement.

“The outsourcing of three airports has been initiated within the scope of public-private partnership […] to engage private investor/airport operator through a competitive and transparent process to run the airports, develop appertaining land assets and enhance avenues for commercial activities and to garner full revenue potential,” the ministry said.

 

[MenInG]

Pakistan's finance minister has cancelled a visit to Washington for spring meetings of the International Monetary Fund (IMF) and World Bank, government officials said on Friday, citing domestic political turmoil as the reason.

FILE PHOTO: The IMF logo is seen outside the headquarters building in Washington
FILE PHOTO: The IMF logo is seen outside the headquarters building in Washington
© Thomson Reuters
Minister Ishaq Dar was scheduled to attend the meetings from April 10 and see top IMF officials and multilateral creditors in a bid to secure stalled funding that the South Asian country desperately needs to avert a balance-of-payments crisis.

Islamabad has been negotiating with the IMF since early February to secure $1.1 billion funding as part of a $6.5 billion rescue programme agreed in 2019.

Two government officials cited political turmoil as the reason for the cancellation. The English-language Express Tribune newspaper quoted Dar as saying he was not going because of the political crisis.

Khan has been challenging the government since he was ousted as prime minister after losing a vote of confidence in parliament a year ago.

Khan has been heading a protest campaign to press for a new election. Prime Minister Shehbaz Sharif has rejected Khan's demand, saying a general election is due anyway late this year.

In the latest twist, the Supreme Court has ordered voting in snap polls for two provincial assemblies to go ahead but the government has rejected the court order.

While Khan wants the provincial elections now, Sharif says it is too costly to organise votes both now and again later in the year, and all of the votes should be at the same time later.

The government also says two rounds of voting this year would put too much strain on agencies responsible for election security when they are also facing a resurgent Islamist militant threat.

The Supreme Court has said it would be illegal to delay the provincial votes.

The officials said the finance secretary, the top civil servant in the ministry, and the central bank governor would likely lead Pakistan's delegation to Washington.

Reuters

 

[MenInG]

International Monetary Fund (IMF) Middle East and Central Asia Director Jihad Azour on Wednesday expressed his confidence that the staff-level agreement between Pakistan and the international money lender would be signed “soon” following the board’s approval.

The remarks came during the IMF’s spring meeting held in Washington, which Finance Minister Ishaq Dar attended via Zoom from Islamabad, a statement issued by the Finance Division said.

 

[MenInG]

The International Monetary Fund (IMF) has “welcomed” Pakistan’s confirmation of having secured crucial bilateral support from key partners and said it looked forward to receiving further “financing assurances as soon as possible”, which would help conclude the much-delayed ninth review of a $7 billion loan programme.

The statement from the Fund came a day after Finance Minister Ishaq Dar said the UAE had confirmed its commitment to the IMF for its bilateral financial support of $1 billion to Pakistan, bringing the country one step closer to securing the deal with the lender that is critical for avoiding default.

The finance minister had also announced that the State Bank of Pakistan was to receive on the same day the third and last disbursement from the Industrial and Commercial Bank of China (ICBC) worth $300 million out of its $1.3bn loan.

Today, in a statement available with Dawn.com, IMF Mission Chief to Pakistan Nathan Porter said, “We welcome the recent announcement of important financial support to Pakistan from key bilateral partners.

DAWN

 

[cricketjoshila]

The International Monetary Fund (IMF) has “welcomed” Pakistan’s confirmation of having secured crucial bilateral support from key partners and said it looked forward to receiving further “financing assurances as soon as possible”, which would help conclude the much-delayed ninth review of a $7 billion loan programme.

The statement from the Fund came a day after Finance Minister Ishaq Dar said the UAE had confirmed its commitment to the IMF for its bilateral financial support of $1 billion to Pakistan, bringing the country one step closer to securing the deal with the lender that is critical for avoiding default.

The finance minister had also announced that the State Bank of Pakistan was to receive on the same day the third and last disbursement from the Industrial and Commercial Bank of China (ICBC) worth $300 million out of its $1.3bn loan.

Today, in a statement available with Dawn.com, IMF Mission Chief to Pakistan Nathan Porter said, “We welcome the recent announcement of important financial support to Pakistan from key bilateral partners.

DAWN

What is the endgame here?

What after this 7bn bailout?

Pakistan will require more funds in near future.

There needs to be efforts to increase revenue and exports.

 

[MenInG]

The International Monetary Fund (IMF) is preparing to discuss Pakistan’s budget plans for the coming financial year, as part of a long-awaited bailout tranche from the lender for the cash-strapped nation, the IMF’s Pakistan mission chief told Reuters on Thursday.

Negotiations over key budget targets such as the fiscal deficit are one of the last hurdles before the IMF approves a staff-level agreement to release $1.1 billion in funding, which has been delayed for months, that is crucial for Pakistan to resolve an acute balance of payments crisis.

A successful staff level agreement (SLA) for the 9th review, which has been pending since November, will unlock the $1.1 billion tranche.

The funding is a part of a $6.5bn bailout package the IMF approved in 2019, which is due to end in June, prior to the budget.

 

[MenInG]

Minister of State for Finance Dr Aisha Ghaus Pasha termed a statement spelling out conditions to unlock the stalled bailout package by the International Monetary Fund (IMF) as "meddling in internal affairs".

Earlier this week, the IMF had urged Pakistan to follow the Constitution in order to resolve its political disputes, as Prime Minister (PM) Shehbaz Sharif contacted Managing Director (MD) Kristalina Georgieva to revive the derailed $6.5 billion bailout package apparently in a last-ditch effort to avoid default.

The discussion between Shehbaz and Georgieva took place on Saturday after the finance ministry could not break the deadlock over the loan talks during the past four months, official sources told The Express Tribune.

Two days after the highest-level contact was established between Shehbaz and Georgieva, IMF Mission Chief to Pakistan Nathan Porter gave an unusual statement, expanding the IMF’s focus to the political arena.

“We take note of the recent political developments, and while we do not comment on domestic politics, we do hope that a peaceful way forward is found in line with the Constitution and rule of law.”

The statement came on the heels of an ongoing crackdown against the PTI workers, abductions of people, breach of the 90-day constitutional limit to hold elections in the two provinces and trial of civilians in military courts under the Army Act. Usually, the IMF does not comment on political matters.

In response to questions sent by The Express Tribune, Porter also spelled out the conditions that Pakistan has to meet to reach an agreement with the foreign lender. These include arranging foreign loans, approval of a new budget in line with the IMF framework, and restoration of the foreign exchange market’s proper functioning.

The sources said that the prime minister saw the IMF as the last resort to avoid a default and that was why he decided to intervene. After the conversation with the IMF chief, the premier instructed the finance ministry to share details of the next budget with the IMF.

Speaking to journalists today, however, the minister of state for finance said Pakistan had other options should the deal with the IMF fall through.

"The finance ministry is not unprepared if an agreement is not reached with the IMF," said Pasha, "a Plan B is always in place but our preference would be to go with the IMF programme".

"Pakistan is running in accordance with the law," she stressed adding that "the statement by the IMF mission chief to Pakistan is extra-ordinary."

Read More Efforts on to put economy back on track

"Intervening in Pakistan's internal affairs is not the IMF's mandate," she furthered.

The minister categorically stated that a delay in the resumption of the programme would not be in the interest of both parties, noting that PM Shehbaz has provided assurances to MD Georgieva about Pakistan's commitment to completing the conditions to complete the programme.

"Hopefully we will reach an agreement before the new budget is presented and by June 30, the IMF programme will be completed," said Pasha.

She also noted that the budget of the new fiscal year will be the "election-year budget" and is being prepared on the basis of June 9.

The minister also said that the IMF allows targeted subsidies to Pakistan.

Express Tribune

 

[MenInG]

Prime Minister Shehbaz Sharif has said Pakistan is “very hopeful” of finalising a deal with the International Monetary Fund (IMF) this month.

“We are still very hopeful that the IMF program will materialise. Our ninth review by the IMF will match all terms and conditions and, hopefully, we’ll have some good news this month,” he told Anadolu in an exclusive interview in the Turkish capital Ankara.

The premier was in Ankara for President Recep Tayyip Erdogan’s inauguration, one of dozens of heads of state and government who attended Saturday’s ceremony.

Islamabad has been negotiating with the IMF since early February for the release of $1.1 billion, part of a $6.5bn bailout package inked in 2019 by the previous government of former prime minister Imran Khan.


DAWN

 

[daytrader]

Preparations under way for talks with IMF team
Ministry of Finance started preparations for holding upcoming review talks with IMF this week, and evaluated progress on key targets

ISLAMABAD: The Ministry of Finance has started preparations for holding the upcoming review talks with the IMF this week, and evaluated progress on key targets, including achieving disbursement of Rs87.5 billion cash transfers to beneficiaries under the BISP programme.

Under the quantitative performance criteria, the ceiling on the amount of government guarantees related target was envisaged at Rs4,000 billion but the Ministry of Finance restricted total guarantees at Rs3,853 billion till the end of September 2023. However, the external financing needs might become the most difficult issue for Pakistan during the upcoming review talks with the IMF.

The forex market functioning might also surface another bone of contention as the IMF it placed under structural benchmark for withdrawal of the circular on prioritisation in providing forex for certain types of imports introduced in December 2022, with the purpose of “ensuring full market determination of the exchange rate”.

The Ministry of Finance held its meeting to gauge progress on quantitative performance criteria, continuous performance criteria, indicative target, and structural benchmark conditions agreed with the IMF for the end of September 2023 under the $3 billion standby arrangement (SBA) programme. The IMF team is scheduled to arrive in Islamabad on November 2, 2023, and will stay here probably till November 16, 2023.

Preparations under way for talks with IMF team

Ministry of Finance started preparations for holding upcoming review talks with IMF this week, and evaluated progress on key targets

www.thenews.com.pk

 

[BouncerGuy]

IMF talks start with polls date in focus

ISLAMABAD: The International Monetary Fund (IMF) on Thursday inquired the Pakistani authorities about the next general elections as well as the functioning of the Special Investment Facilitation Council -- the two most crucial issues that affected the country’s political and economic landscapes.

Nathan Porter, the Washington-based lender’s mission chief to Pakistan, raised the points during his maiden meeting with interim Finance Minister Dr Shamshad Akhtar.

Porter set the tone for the 14-day long review talks that are scheduled to end on November 15 -- if everything goes according to the plan.

The IMF official praised the government’s performance during the first quarter of the ongoing fiscal year -- an area where the finance ministry and Federal Board of Revenue (FBR) had so far exceeded expectations.

The mission chief raised the issues of the next general polls and the SIFC’s functioning, at least two participants of the meeting told The Express Tribune.

They said the interim finance minister said she would arrange the IMF delegation’s meetings with the Election Commission of Pakistan (ECP) and the SIFC secretariat.

Hours after the IMF-Pakistan opening session, President Dr Arif Alvi and the ECP agreed on February 8 as the elections date when they met on the directives of the Supreme Court, clearing the air on the political horizon of the country.

The elections date has direct implications on the next IMF programme review and also on any new deal with the Washington-based lender.

The tentative date for the IMF board meeting for the next review is March 1, implying that the third review for the $1.2 billion tranche should take place in around February next year.

The current $3 billion IMF bailout was given for a period of nine months, ending in April next year on the assumption that the new government would enter into another programme after the elections.

On Thursday, the IMF mission began discussions for the first review of the $3 billion programme, which would pave the way for the approval of a $710 million loan tranche by the Washington-based lender’s executive board in December.

The IMF has imposed a set of conditions in nearly every major area of the budget, with some of them being time-bound and others to be implemented throughout the fiscal year.

The SIFC is a civil-military body set up to attract foreign investment in Pakistan.

According to a recent report by the Policy Research Institute of Market Economy (PRIME), the SIFC may fall short of its mission to attract significant foreign investment because of its lack of focus on structural issues.

The PRIME report cautioned that the inclusion of the military in economic decision-making without the requisite expertise could not only destabilise the country, but also lead to the failure of key initiatives.

However, an SIFC official negated the concerns raised in the PRIME report, arguing that it was too early to make a judgment about the body, which had just started working in June this year.

The sources said the IMF mission chief outlined the energy sector and tax reforms as the primary areas of discussions during the review talks.

The IMF delegation will also review the Circular Debt Management Plan. The plan is being implemented to control the circular debt in the power sector.

The Washington-based lender’s team asked about the government’s policy on the supply of gas to fertiliser plants, while referring to the last meeting of the Economic Coordination Committee (ECC) of the Cabinet.

On Wednesday, the ECC could not agree on the discontinuation of subsidised gas supply to two fertiliser plants and extended it for another two weeks aimed at developing consensus among all stakeholders.

The sources said the IMF team also suggested to the Pakistani government that it should no longer set the fuel prices.

The government fortnightly sets the fuel prices but the IMF is of the view that they should be left to the market forces.

Former finance minister Miftah Ismail had once suggested ending the role of his ministry in determining the fuel prices, but subsequently the proposal was shelved.

The interim finance minister also assured the IMF to arrange a briefing on the Sovereign Wealth Fund, which the government had set up in August and transferred the assets of profitable entities into it.

The mission chief sought details about the implementation of the state-owned enterprises (SOEs) policy, which largely remained on paper with little progress.

A federal minister, adviser, and special assistant to the prime minister are sitting on the boards of some of these companies in violation of rules and regulations.

During the first quarter of this fiscal year, the finance ministry demonstrated a strong performance.

Unlike the previous fiscal year, no new supplementary grants were issued during the first quarter -- meeting another important IMF condition.

The ministry also met the conditions of restricting the budget deficit and increasing the petroleum levy to a maximum of Rs60 per litre on petrol as well as high-speed diesel.

There may be an issue about the low federal development spending.

Also on Thursday, US Ambassador to Pakistan Donald Blome called on Senator Ishaq Dar, the leader of the house in the Senate.

“The progress and current status of the ongoing IMF programme were discussed,” a statement issued by the Senate secretariat read.

Senator Dar, a former four-time finance minister, expressed his optimism about the successful conclusion of the second review of the IMF programme.

The four provincial governments have also met the IMF’s condition to ensure a spending of Rs465 billion on health and education during the first quarter. The actual spending exceeded this requirement, totalling Rs482 billion.

The IMF has also placed a condition that the FBR would share the details of asset declarations of civil servants with commercial banks for customer due diligence.

The IMF will receive the status on the implementation of the condition next week.

The FBR has met the condition to collect Rs1.98 trillion in taxes during the first quarter of this fiscal year.

It has also achieved the target of adding only Rs32 billion to tax refunds during the first quarter, staying within the target of restricting refunds to Rs247 billion.

According to a statement issued by the finance ministry, Porter appreciated the interim government's commitment to meeting the first quarter targets and commended its measures taken in some critical areas.

He further underscored the importance of continuation of these efforts for staying on track for the economic stability of the country.

The statement read that Interim Finance Minister Dr Akhtar expressed her appreciation for the continued support and assistance of the IMF.

She reaffirmed the government's commitment to working closely with the IMF to ensure the successful completion of the stand-by arrangement (SBA) and achieve the economic objectives, it added.

TRIBUNE​

 

[BouncerGuy]

Plan shared with IMF to add 1.5m new taxpayers

ISLAMABAD: Pakistan’s top tax authority has unveiled an ambitious plan to the International Monetary Fund to bring 1.5 million new taxpayers into the net by the end of June 2024.

The blueprint of the strategy, which was shared during the technical-level discussions with IMF officials, represents a significant milestone in Pakistan’s efforts to bolster its fiscal framework, a senior tax official told Dawn on Saturday.

The technical team has engaged in multiple rounds of discussions with tax officials from the Federal Board of Revenue (FBR), focusing on the tax performance in the first quarter. The IMF representatives have expressed satisfaction with the tax collection efforts, the official revealed.

The IMF’s technical staff initiated the first evaluation of the short-term $3bn loan agreement on Nov 2, which concluded on Nov 10. The majority of the targets appear to be on track, paving the way for the release of a $710 million tranche in December.

“We have shared our projections for revenue collection in the next eight months with the IMF officials,” the official said, adding that no demand came from the Fund to take fresh tax measures.

FBR’s top officials have assured the IMF that the projected revenue collection target of Rs9.415tr for FY24 will be met without the need for any additional tax measures.

Furthermore, the official dismissed the rumours that the IMF is demanding an increase in the revenue collection target or plans to impose more taxes on traders and the real estate sector.

This assurance negates any speculation about additional taxation measures. The sectoral taxing is our internal arrangement, the official said, adding that the IMF is only concerned with overall revenue collection performance.

Numerous attempts had been made in the past to bring traders, into the tax net. However, taxing this sector ahead of the upcoming general elections on Feb 8, 2024, could prove challenging, as many traders’ unions have political affiliations.

Similarly, the FBR may face difficulties in revising tax tables for the real estate sector, which also has strong political connections. Despite these challenges, the tax official remains confident that the FBR is on track to meet the overall revenue collection target for the current fiscal year.
​

DAWN

 

[daytrader]

Pakistan needs $25b loans this FY: IMF
Lender doesn’t agree with growth, CAD projections

ISLAMABAD:
The International Monetary Fund (IMF) has revised Pakistan’s foreign loan requirements to $25 billion for this fiscal year -- reducing it by $3.4 billion -- and also lowered the economic growth projection to just 2%, turning down the government’s external as well as macroeconomic forecasts.

Finance ministry sources said the IMF had also lowered its inflation projection for the country to 22.8% for this fiscal year -- reducing it from 25.9%.

The IMF did not accept the finance ministry’s projections for the current account deficit (CAD), imports, economic growth, inflation and gross financing requirements.

However, it adjusted all these numbers during the first review talks in comparison with the estimates of July this year.

The revisions to the gross external financing requirements -- a sum of money needed to fill the CAD as well as the repayment of maturing debt --- and to the macroeconomic projections were made during this week’s first review of the $3 billion bailout package.

The IMF remained successful in acquiring a date for the general elections and in return ignored a few critical areas, which in the past had become a cause for the failure of the previous $6.5 billion bailout package.

It also brought the activities of the Special Investment Facilitation Council under its purview.

The finance ministry spokesperson, Qamar Abbasi, did not respond to a request for comments.

Pakistan needs $25b loans this FY: IMF | The Express Tribune

Lender doesn’t agree with growth, CAD projections

tribune.com.pk

 

[daytrader]

FBR staff unveiled as non-filers
Hundreds of FBR employees failed to file tax returns, wealth statements

ISLAMABAD:
Hundreds of employees of the Federal Board of Revenue (FBR) are chronic non-filers, exposing them to the risk of severe penalties and putting the resolve of the tax administration to broaden the national tax base to the test.

Official documents and background interactions with the tax authorities revealed that a large number of the employees of the FBR have not filed their tax returns for tax years 2021, 2022, and 2023.

Some have filed returns for one year but then did not file their annual statutory income tax and wealth statements for another two years, showed the documents. In certain cases, the returns were not filed for the current tax year whose last extended date for filing was October 30th.

When contacted, Chairman FBR Amjad Zubair Tiwana said that all those FBR officers who have not yet filed their returns would receive notices by Saturday. Tiwana said that a majority of these non-filers got extensions for filing returns, which expired on Thursday.

The chairman said that the non-compliant officers are now at risk of administrative measures, including disconnection of their utility connections.

A senior FBR officer said that out of over 3,200 total officers in the pay scales of 17 to 22, nearly 2,600 have submitted their tax statements for this year.

FBR staff unveiled as non-filers | The Express Tribune

Hundreds of FBR employees failed to file tax returns, wealth statements

tribune.com.pk

 

[daytrader]

Pakistan’s forex reserves to be $9bn by end of current fiscal: IMF
IMF estimated that Pakistan’s foreign exchange reserves held by SBP would be standing at $9 billion by the end of the current fiscal year

ISLAMABAD: The International Monetary Fund (IMF) has estimated that Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) would be standing at $9 billion by the end of the current fiscal year.

Although the IMF did not forecast any gap on the external account front, a worrisome projection was made by the Fund that the remittances from abroad would decrease by $3.5 billion, from an earlier envisaged target of $32.889 billion to $29.377 billion for the current fiscal year ending on June 30, 2024.

The oil import bill might go up from $15.3 billion to $17.63 billion on per annum basis for the current fiscal year, the Fund said.

The projection about the foreign exchange reserves clearly indicates that after the expiry of ongoing $3 billion Standby Arrangement (SBA) programme, Pakistan would have to negotiate another medium-term IMF programme before next fiscal year budget, 2024-25.

Meanwhile, IMF’s Managing Director Kristalina Georgieva met Pakistan’s Caretaker Prime Minister Anwaar-ul-Haq Kakar on the sidelines of COP 28 meeting in Dubai and stated in her tweet: “Met with Pakistani Prime Minister Anwaar_Kakar at COP28. We discussed commendable progress made [by] the government to maintain economic stability and timely implementation of planned reforms.”

Pakistan’s forex reserves to be $9bn by end of current fiscal: IMF

ISLAMABAD: The International Monetary Fund has estimated that Pakistan’s foreign exchange reserves held by the State Bank of Pakistan would be standing at $9 billion by the end of the...

www.thenews.com.pk