IMF identifies key challenges in Pakistan's $7 billion loan package implementation
Published On : 2024-11-16T21:07:35+0530 [ IST ] |
Author : Mayur_Tembhare
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The International Monetary Fund has identified several challenges in implementing the $7 billion loan package to Pakistan including tax collection shortfalls and delays in securing foreign loans.
The IMF expressed concerns about Punjab's new agriculture income tax legislation which remains misaligned with federal laws and deviates from the National Fiscal Pact.
The international agency has advised Pakistan to approach Saudi Arabia for deferred oil payments and China fordebt rescheduling.
The lender also expressed concerns about delayed privatisation of power distribution companies and maintained its requirement for amendments to the Pakistan Sovereign Wealth Fund Act by December.
Additionally the IMF highlighted the necessity of revising the gas sector's circular debt definition and ensuring regular monthly reporting noting that both power and petroleum divisions currently fail to report these figures consistently.
The organisation discovered inadequacies in implementing the National Fiscal Pact which all five provincial finance ministers signed to standardise income tax rates and transfer certain expenditure responsibilities to provinces.
The IMF has requested that provincial property tax and agricultural income tax systems be aligned with FBR standards through legislation.
Despite Punjab Assembly passing the Agriculture Income Tax Amendment Act of 2024 it failed to meet the target of raising agriculture income tax rates to 45 per cent.
Punjab Information Minister Azma Bukhari rejected claims of pact violation saying it is not in any breach. Even the IMF has read the amendments and is fine with them.
"If there is a breach then the IMF would have said that during the last two days' meetings," she said.
Sources said Sindh's government also violated the National Fiscal Pact alongside Punjab showing little commitment to implementation during IMF meetings.
In a significant development the finance ministry withdrew its October 31 report indicating the Punjab government's 160 billion budget deficit which missed the Rs 342 billion cash surplus target.
Pakistani authorities maintain that the IMF hasn't provided final conclusions regarding revenue shortfall solutions and will communicate requirements after consulting their Washington headquarters.
Source : Reporters From Sunrise Chronicles
Tags : imfoctober 31 report indicating punjab government , Fiscal Pact , billionpunjab information minister azma bukhari rejected claims , Agriculture Income Tax Amendment Act , Rs , The , Meanwhile , If , pakistanraising agriculture income tax rates , Punjab ,
Summary :
The International Monetary Fund has identified several challenges in implementing the $7 billion loan package to Pakistan including tax collection shortfalls and delays in securing foreign loans.
