Pakistan’s tax shortfall, delay in materialising foreign loans major concerns in implementation of USD 7 billion loan: IMF

Islamabad, Nov 16: The IMF has flagged Pakistan’s tax shortfall and a delay in materialising foreign loans, among other issues, as challenges in implementing the USD 7 billion loan package.

At the end of the International Monetary Fund (IMF) mission, which for five days held in-depth meetings with Pakistan officials about the implementation of conditions linked with the loan, the global lender also expressed concerns about Punjab’s new agriculture income tax law which is still not fully aligned with the federal legislation and deviated from the National Fiscal Pact, The Express Tribune reported.

A source said the IMF mission flagged two major concerns on Friday: the Federal Board of Revenue (FBR) ‘s underperformance and a delay in finalising the loans to fill the USD 2.5 billion gap.

The global lender again asked Pakistan to contact Riyadh to secure oil on deferred payments and request Beijing to reschedule debt.

In addition, the IMF had concerns about the delay in the privatisation of the power distribution companies (DISCOs) and stuck to its condition of amending the Pakistan Sovereign Wealth Fund Act by the end of December.

The IMF emphasised amending the gas sector’s definition of circular debt and ensuring its monthly reporting. Both the power and the petroleum divisions do not regularly report these numbers.

The IMF also found flaws in the implementation of the National Fiscal Pact signed by all five provincial finance ministers to align the income tax rates and transfer some expenditure responsibilities to the provinces.

The sources said the IMF asked the property tax and agriculture income tax regime by provinces to be brought in line with the FBR through legislation.

Although the Punjab Assembly passed the Agriculture Income Tax Amendment Act of 2024, it fell below the desired target of raising the agriculture income tax rates to 45 per cent.

Punjab Information Minister Azma Bukhari denied any breach of the pact and said the newly amended provincial law addressed the needs of the National Fiscal Pact.

“It’s not in any breach. Even the IMF has read the amendments and is fine with them.”

“If there is any breach then the IMF would have said that during the last two days’ meetings,” the information minister said.

In addition to Punjab, the Sindh government also violated the National Fiscal Pact as it did not show any serious intention to implement it during meetings with the IMF, sources said.

In yet another major development, the finance ministry on Friday withdrew its October 31 report saying the Punjab government ran a budget deficit of Rs 160 billion, missing the overall cash surplus target of Rs 342 billion.

The Pakistani authorities however claimed the IMF had not yet given its final verdict on the issue of bridging revenue shortfalls and would send the “asks” after consultations with its headquarters in Washington. (PTI)

Hot this week

Meghalaya man missing in Bangkok

Shillong, Jan 10: A 57-year-old Meghalaya resident, Mr. Treactchell...

Pay hike of Assam ministers, MLAs likely as 3-member panel submits report

Full report likely by Oct 30 Guwahati Sept 25: There...

ANSAM rejects Kuki’s separate administration demand, says bifurcation not acceptable

Guwahati, Sept 8: Rejecting the separate administration demand of...

Meghalaya Biological Park Inaugurated After 25 Years: A New Chapter in Conservation and Education

Shillong, Nov 28: Though it took nearly 25 years...

Meghalaya’s historic fiber paves the way for eco-friendly products and sustainable livelihoods

By Roopak Goswami Shillong, Oct 25: From making earbuds to...

Oppn slams PM Modi over US tariff

New Delhi, Apr 3: The Congress and other opposition...

Govt tables Waqf bill in RS; Won’t snatch Muslims’ rights, says Rijiju

New Delhi, Apr 3: Union Minority Affairs Minister Kiren...

Every citizen equally important: Conrad

CM recalls contributions of Karbi leaders in statehood movement   Shillong,...

New Waqf Act beneficial for tribals: State BJP

Shillong, Apr 3: The state BJP has welcomed the...

Proposed coke plant draws flak in EJ Hills  

Dorbar, KSU demand cancellation of ‘consent to establish’   Shillong, Apr...

All-party committee to study demand for winter capital

Shillong, Apr 3: In a step further towards recognising...

NHRC intervenes in Assam journalist’s arrest, seeks report from police chief

Guwahati, April 3: The National Human Rights Commission (NHRC)...
spot_img

Related Articles

Popular Categories

spot_imgspot_img