Pakistan is likely to sign a staff-level agreement with the International Monetary Fund (IMF) by next week as the lender is satisfied with Islamabad’s efforts to meet the commitments for the revival of the stalled loan program.
According to credible sources in the Finance Ministry for the revival of the stalled loan program after the 9th review as the IMF has appreciated Islamabad’s efforts.
Also Read: IMF Talks, State Bank to increase the interest rate
Furthermore, the IMF is seen as confident with the commitments of the State Bank Governor Jameel Ahmed. The international lender has given the Green signal for the staff-level agreement with Pakistan, which is likely to be signed next week.
Earlier last month President Arif Alvi on approves Finance (Supplementary) Bill known as Mini Budget as it gets approved by National Assembly.
The approval was given in accordance with Article 75 of the constitution.
President Arif Alvi gave approval after National Assembly (NA) passed the Finance (Supplementary) Bill 2023, proposing additional taxes and duties of Rs170 billion to meet the IMF conditions for the revival of the Extended Fund Facility (EFF).
‘Mini-Budget’
Federal Finance Minister Ishaq Dar introduced the Finance Bill (Supplementary) the “mini-budget” in the National Assembly in order to meet IMF Conditions for the approval of the loan program needed to avoid a default.
While addressing the Parliament, the finance minister compared the performance of the previous PML-N and PTI governments.
The finance minister also announces to increase General Sales Tax GST rate from 17 to 18% and increasing the Federal Excise Duty (FED) on cigarettes and Tobacco in order to fetch an additional Rs115 billion out of Rs170 billion agreed to by Pakistan in line with the IMF conditions.
Mini-budget proposals
- Govt has increased GST on luxury items from 17% to 25%
- Increase in federal excise duty on cigarettes and fizzy drinks.
- Increase in federal excise duty on cement
- GST has been increased from 17pc to 18pc
- Benazir Income Support Programme (BISP) handouts increased to Rs400bn from Rs360bn
- FDE on business and first-class air tickets to now be Rs20,000 or 50% — whichever is higher
- GST is to not be imposed on essential goods.
IMF Virtual Talks
Virtual talks between the International Monetary Fund (IMF) and Pakistan for the completion of the ninth review of the $7 billion loan program began a day earlier before presenting Finance Bill.
The officials of the finance ministry would brief the IMF about the implementation of the conditions set by them for the revival of the loan program. It was reported that the International Monetary Fund (IMF) and Pakistan moved closer to the revival of the $7 billion Extended Fund Facility (EFF) as the IMF responded to the Memorandum of Economic and Financial Policies (MEFP) draft and soon the revival of $7 billion Extended Fund Facility (EFF) will be completed.
