ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistani authorities to move towards implementing the stalled loan program in the next three weeks if they want to revive it.
The IMF told Pakistani officials that it was time to take “all necessary steps”.
A time frame of two to three weeks has been given to implement all the necessary steps to pave the way for the staff level agreement and release the $1 billion tranche under the Expanded Fund Facility (EFF).
Finance Minister Ishaq Dar is expected to consult with his core economic team in a few days to agree on the necessary steps to be taken in the coming weeks to pave the way for the revival of the IMF programme.
Speaking to JEE News, a top official confirmed on Friday, “The ball is now in Islamabad’s court where the IMF has asked the government to fix the cash crunch in the energy sector, including power and gas. , additional taxation measures and pursuing structural reforms for the remainder of the fund programme.
On Thursday, officials from Pakistan and the IMF held another round of virtual talks, with the finance minister assuring the lender that Pakistan would receive a loan by the end of December or January, taking into account the dwindling foreign exchange reserves. An inflow of dollars from a friendly country is expected by early. from the State Bank of Pakistan which declined to $6.11 billion.
Sources said the finance ministry asked the power ministry to revise the roadmap to carve out the circular debt management plan (CDMP) by 2023.
“We cannot allow electricity surcharge in the range of Rs 31.60 or Rs 12.69 per unit increase, keeping in view the political cost involved,” an official said, adding that the authorities concerned have been notified of the revised CDMP. was assigned to come up with Thus, where Pakistan can revise the electricity rates from the lower side to the higher side.
Also, the government can improve efficiency and governance to reduce dependence on subsidies. The Ministry of Power has agreed to prepare a revised roadmap for the CDMP for 2022-23 that is acceptable to both the government and the IMF.
Independent analysts say it could be the government’s wish list to move towards austerity, striking a balanced approach.
However, a patchwork restoration of the IMF program may not work, so the government has to come up with a viable plan to end the revolving debt monster of up to Rs 4 trillion in both the power and gas sectors.
The IMF has agreed to provide an adjuster of Rs 340 billion for the increase in the budget deficit due to flood-related expenditure in the current fiscal year.
The Fund has also asked Pakistan to take additional steps to bridge the yawning gap to meet the target set by the FBR. The IMF has estimated that the FBR may not achieve the revenue collection target of Rs 7470 billion for the current financial year.
The IMF expressed concern that the number of income tax filers so far is less than 3 million as it was 2.913 million against 3.4 million in the previous fiscal year.
Top FBR officials informed that companies will file corporate returns by December 31, 2022, so the number of filers received may increase further.
The government can take additional taxation measures by abolishing additional customs duty and giving another tax amnesty scheme to the merged districts of FATA/PATA.
Due to non-tax revenue, the Petroleum Development Levy is down, and the government is looking at the banking sector to reap the huge profits they have earned through currency manipulation in recent months.
This was one of the options, sources said, adding that the government would also increase the petroleum levy on diesel in the coming months to collect more revenue.
