At a time when its economy is reviving, the International fund (IMF) has advised Pakistan to not leave its ongoing programme while Islamabad is getting to launch Eurobonds worth $2.5 billion to spice up its exchange reserves.
“I had a really constructive meeting with IMF officials on Midsummer Eve (Wednesday) regarding various issues,” minister of finance Shaukat Tarin told Dawn after an appointment on the IMF programme to the National Assembly Committee on Finance and Revenue.
At the meeting chaired by MNA Faiz Ullah, Mr Tarin said the govt was also getting to raise sufficient funds through Sukuk bonds, green bonds and panda bonds. The Eurobonds would be issued within the next three to 6 months.
Mr Tarin said he had held out an assurance to IMF that Islamabad would remain in its programme. He also disclosed that IMF had shown willingness to be “flexible in their demands” from Islamabad.
“I am assured of full support from the Fund side,” the minister said.
The change of policy from contraction to growth within the allow 2021-22 was interpreted by many economists that Pakistan could get out of the IMF programme after improvements on the external side. However, Mr Tarin wants to continue with the programme “with some flexibilities”.
Says $2.5bn Eurobonds to be launched within months
He said the IMF would conduct its sixth and seventh review of the programme simultaneously in September. The IMF’s Executive Board is scheduled to satisfy on July 5-7.
“Now Pakistan’s case is going to be approved within the board’s meeting in September,” Mr Tarin said.
Before the announcement of the budget, IMF had asked the govt to impose a tax of Rs150bn on individuals, allow an instantaneous increase of Rs1.39 in power tariff and increase the electricity price by Rs4.95 within the second phase.
“This wasn’t possible because these measures are inflationary,” the minister said.
In his statement during the meeting, Mr Tarin said he had told IMF that he planned to prevent making capacity payments to electricity-producing companies. “I also gave an idea to IMF aimed toward reducing line losses,” he said, adding that he had assured the Fund that he would put an end to extend in circular debt.
Asked about the sources for $25bn required next year, the minister said the quantity would be raised through Sukuk, panda and green bonds to satisfy the demand for dollars.
Mr Tarin promised that each one of the anomalies as acknowledged by the members of the parliamentary committee within the allow 2021-22, especially concerning the businessmen, would be removed.
He said that to make an environment conducive to a national consensus on the economy, he was able to sit with the opposition parties for formulating a charter for the economy. He said the federal is bearing the expenses for health and deployment of Rangers within the provinces.
To support the SMEs, he said, the govt planned to supply Rs100bn loan within the next budget.
He confirmed that Section 203 introduced within the Finance Bill 2021 had been amended, so notices would be issued through a 3rd party and therefore the decision for any arrest would be taken at the extent of the minister of finance. the facility to arrest had been removed from the assistant commissioner of the Federal Board of Revenue (FBR).
He said the audit would be administered through a 3rd party. “We have received information about 7.2 million tax evaders,” he said, adding that notices would be sent to tax evaders through third parties. “Those who don’t want to enter the tax net are going to be arrested.”
The committee’s members demanded that non-profit organisations be allowed to open bank accounts. MNA Ahsan Iqbal said that registered NGOs or non-profit organisations face great difficulties in opening accounts.
The minister assured the committee that procedures for opening bank accounts for non-profit organisations would be reviewed.