ISLAMABAD: Cash-starved Pakistan has introduced a number of changes to its budget for fiscal year 2023-24 in a bid to revive the International Monetary Fund’s programme and secure a stalled $1.2 billion tranche, the country’s finance minister, Ishaq Dar, said on Saturday.
Addressing the National Assembly, the minister said Pakistan and the IMF held detailed negotiations as a last effort to complete the pending ninth review. Dar said that it was decided between Pakistan and the IMF for a “last final push” to move the review, which expires on June 30,forward, following which detailed negotiations were held with an IMF delegation in the last three days to complete the ninth review.
For the fiscal year starting next month, Dar said, the federal government will raise a further Pakistani Rs 215 billion($768 million) in new taxes and cut Rs 85 billion (around $304 million) in spending, as well as a number of other measures to shrink the fiscal deficit.The finance minister said the suggestion for Rs 215billionin new taxes came about as a result of the talks.
He said the government had completed all prior actions and achieved compliance on the IMF’s demand but the external financing gaphad madePakistan’s casecomplicated.
He said the Rs 85 bn spending cut would also be achieved without any curtailment in the federal development budget orcuts in the raise insalaries and pensions of government employees.
Providing updated figures for the FY ’24 budget, Dar said the revenue collection target for the Federal Board of Revenue, the country’s tax regulator, was increased to Rs 9,415billion ($33.6 billion)from Rs 9,200billion ($32.84 billion).
Last week, the IMF had raised several issueswith Pakistan’s budget for FY 2024, saying that some of the proposed measures went against theIMFprogramme’s conditionality.For its part, the government responded to theglobal lender’s concerns, saying that it was “flexible” on the budget and remained engaged with the international lender to reach an “amicable solution”.
With reserves at critical levels for the past several months, Pakistan is in dire need of an IMF bailout, without which it may default.
Pakistan was expected to get around $1.2 billion, part of the $6.7billion bailout programme,from the lender in October last year. But thattranche has not materialised in the past eight monthsas the IMF says Pakistan has been unable to meet important prerequisites.
Addressing the National Assembly, the minister said Pakistan and the IMF held detailed negotiations as a last effort to complete the pending ninth review. Dar said that it was decided between Pakistan and the IMF for a “last final push” to move the review, which expires on June 30,forward, following which detailed negotiations were held with an IMF delegation in the last three days to complete the ninth review.
For the fiscal year starting next month, Dar said, the federal government will raise a further Pakistani Rs 215 billion($768 million) in new taxes and cut Rs 85 billion (around $304 million) in spending, as well as a number of other measures to shrink the fiscal deficit.The finance minister said the suggestion for Rs 215billionin new taxes came about as a result of the talks.
He said the government had completed all prior actions and achieved compliance on the IMF’s demand but the external financing gaphad madePakistan’s casecomplicated.
He said the Rs 85 bn spending cut would also be achieved without any curtailment in the federal development budget orcuts in the raise insalaries and pensions of government employees.
Providing updated figures for the FY ’24 budget, Dar said the revenue collection target for the Federal Board of Revenue, the country’s tax regulator, was increased to Rs 9,415billion ($33.6 billion)from Rs 9,200billion ($32.84 billion).
Last week, the IMF had raised several issueswith Pakistan’s budget for FY 2024, saying that some of the proposed measures went against theIMFprogramme’s conditionality.For its part, the government responded to theglobal lender’s concerns, saying that it was “flexible” on the budget and remained engaged with the international lender to reach an “amicable solution”.
With reserves at critical levels for the past several months, Pakistan is in dire need of an IMF bailout, without which it may default.
Pakistan was expected to get around $1.2 billion, part of the $6.7billion bailout programme,from the lender in October last year. But thattranche has not materialised in the past eight monthsas the IMF says Pakistan has been unable to meet important prerequisites.
