Pakistan to raise Rs 215 billion through taxes to fulfil IMF loan conditions

Pakistan will raise Rs 215 billion through taxes to meet the stringent conditions set by the IMF, Finance Minister Ishaq Dar said on Saturday, as the cash-strapped government tried to meet the conditions set by the IMF for a much-needed loan.

Speaking at the closing of a three-day-long general discussion with the International Monetary Fund (IMF) on the budget for the financial year 2023-24 held in the National Assembly, Dar said that Pakistan is trying to fulfil all the formalities the global lender wants them to complete prior to availing the loan.

“As a result of the talks with IMF, for the fiscal year 2023-24, the final taxes of only Rs 215 billion (approximately $750,400,000) have been agreed, ensuring that it will not burden the poor and middle segments of the society,” he said.

The announcement was made by Dar two days after IMF Managing Director Kristalina Georgieva urged Pakistan's Prime Minister Shehbaz Sharif to resolve policy differences at the global lender's staff level prior to getting a much-needed loan to stabilise the country's economy,

The International Monetary Fund (IMF) signed a deal in 2019 to provide $6 billion to Pakistan on the fulfilment of certain conditions.

The plan was derailed several times and the full reimbursement is still pending due to insistence by the donor that Pakistan should complete all formalities.

A member of the federal cabinet joined from Paris the technical round of talks, which took place in Islamabad after the meeting between the IMF MD and Prime Minister Sharif.

Both sides again discussed all the outstanding issues and the government appeared to accept the IMF’s views on a few budgetary numbers.

On Saturday, Dar said that Pakistan would bring down the running expenditure by Rs 85 billion, which would have no impact on the proposed development budget, the raise in salaries and pensions of the federal government employees.

He said Pakistan held talks with the IMF with complete sincerity and assured the House to make details public once the things with the international lender were settled.

Pakistan's efforts to unlock access to the already agreed USD 6 billion loan package are in a quagmire as the budget needs to satisfy the global lender to secure the release of more bailout money for the country's ailing economy.

It is feared that Pakistan might default on external financing commitments without the active support of the IMF.

Pakistan’s economy has been in a free fall mode for the last many years, bringing untold pressure on the poor masses in the form of unchecked inflation, making it almost impossible for a vast number of people to make ends meet.