2024-05-13 13:20:11
(Waqas Azim) The introductory session between Pakistan and the IMF under the new loan program has ended.
After the introductory session, the members of the IMF delegation left the Ministry of Finance. The talks between Pakistan and the IMF will continue for about two weeks. Pakistan is hopeful for a bailout package of more than $6 billion from the IMF. A working paper has been prepared for the Extended Fund Facility loan program from the IMF.
In the introductory session, the Finance Minister, Finance Secretary, Chairman FBR and Governor State Bank were present from Pakistan. Sources say that important targets for the upcoming federal budget were set between the Ministry of Finance and the IMF during the negotiations. It was decided that the government will not take loan from the State Bank during the next financial year.
According to private TV sources, the Ministry of Finance and the IMF have agreed to pay external payments without delay and on time. Bonds will be issued in the international market for payments, imports will not be restricted and international transactions will not be restricted.
Sources said that information from State Bank, Ministry of Finance and Ministry of Energy will be sent to IMF, IMF, FBR, Bureau of Statistics and market base exchange rate information will be taken. Negotiations between Pakistan and IMF will take about two As the week continues, Pakistan is hopeful of getting a bailout package of more than $6 billion from the IMF.
It may be noted that the IMF has asked the FBR to revoke the discretionary powers of the FBR and the Cabinet to grant tax concessions and change the tax rules for NGOs and charitable organizations as well as taxed pensioners. On pensions, the IMF has recommended that pension contributions or benefits be taxed, for this purpose the IMF wants to eliminate the benefit of deducting voluntary contributions to workers’ participation funds and the pension exemption and statement wants to tax them by applying one of the alternatives given.
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The IMF wants tax incentives to be limited to cases where their economic benefits, in terms of employment and value addition to the economy, outweigh the budgetary costs. The IMF has proposed eliminating all tax incentives in the Income Tax Ordinance (ITO), except those that Pakistan is legally obligated to provide or has clear policy reasons such as taxing additional income. Barring , this is estimated to yield 0.2 percent of GDP in additional revenue.
The IMF presented its estimates to the Pakistani authorities, for better management of tax incentives and related areas of tax policy. It has recommended to revoke the discretionary power of the Cabinet to grant
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The IMF has asked the FBR to discuss with the provinces the possibility of harmonizing the tax rate and base of agricultural income tax with that applicable at the federal level, in the Fourteenth Schedule for the manufacturing sector. Abolish the existing SME tax framework and tax all manufacturers, eliminate the special tax regime for the construction sector as soon as practical and subject the sector to standard income tax regimes.
2024-05-13 13:20:11