Policy level talks between Pakistani authorities and the International Monetary Fund (IMF) on seventh review of Extended Fund Facility (EFF) are now expected to be held on Monday amid Fund reservations on Prime Minister Package and tax amnesty scheme for industries.
Sources on condition of anonymity said that Prime Minister’s relief package on petrol and diesel as well as tax amnesty scheme for the industrial sector remained focus of discussion during the talks and the Fund wanted to know why the need of giving such package was felt and whether any working was done or not.
They said that the IMF team’s questions were about the subsidy on petrol and diesel across-the-board instead of targeting it. On amnesty for industrial sector, the IMF concern was whatever name it may be given its essence remains amnesty.
When asked, an official of Finance Ministry expressed total ignorance about the discussion with the IMF, and stated “I don’t know anything about the status of talks.” However, he confirmed that Finance Minister Shaukat Tarin left for Lahore on Thursday and even chaired the meeting of the Economic Coordination Committee (ECC) from there virtually.
The Finance Minister has recently in a press conference stated that the IMF should not have any concern over Prime Minister’s package on electricity and petroleum prices reduction because it would not increase fiscal deficit and borrowing. He also stated that the IMF was consulted on the package to the extent it was necessary.
The government had agreed with the Fund during the 6th review to collect Rs4 per litre petroleum levy on a monthly basis to achieve revised target of non-tax revenue on this account but after the cut in petrol and diesel price by Rs 10 per liter, it would suffer loss on this account.
The story was originally published in Business Recorder on March 12, 2022.