ISLAMABAD: Pakistan and IMF will kick-start policy-level talks on Tuesday. On Monday, both sides will strive again to reconcile the fiscal gap.
These policy-level talks were to begin today, but will kick-start on Tuesday.
According to the Fund’s assessment, Pakistan had a primary deficit gap of 0.9% of GDP. This 0.9% is equivalent to Rs. 800–850 billion, primarily due to less tax and non-tax income and high expenditures.
However, Pakistan refused to accept such a huge fiscal shortfall. Thus, claiming it was anticipated to be between 400 and 450 billion rupees ($0.5 to $0.6% of GDP) for the current fiscal year.
The Washington-based lender estimated that the Federal Board of Revenue of Pakistan (FBR) may fall short of the anticipated tax collection target of Rs7,470 billion by as much as Rs130 billion in 2022-23.
With the support of IMF discounted power rate for export-oriented industries and its link to export revenues can be abolished.
It is incorrect to receive subsidies on the entire production of gas and electricity for the textile industry. This industry sells 40% of its products from the domestic market.
During the technical level discussions, there are still disagreements on determining the precise budget deficit, between Pakistan and the visiting IMF review mission. The new taxation measures will be set once it has been agreed upon with the IMF. And it will be revealed in the future mini-budget. The technical level talks will continue on Monday due to the failure to reach an agreement on the budget gap’s amount. Moreover, policy level conversations are anticipated to start on Tuesday. According to the sources who spoke to a small group of media in private on Saturday.
Both parties will sign a staff-level agreement on 9 Feb.