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| Carbon surcharge rate not high: IMF |
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Resident chief says IMF has no problem with the levy that is a norm even in oil producing countries
Wednesday, June 24, 2009
By Mehtab Haider
ISLAMABAD: Terming the rate of fixed Carbon Surcharge as ‘modest’, the International Monetary Fund (IMF) said on Tuesday that the fixed tax on petroleum products announced by the government in Budget 2009-10 was not high compared with international standards.
“The rate of fixed Carbon Tax announced by the government in the Budget 2009-10 was not higher in terms of international standards,” the resident chief of the IMF in Pakistan, Paul Ross said while talking to The News here on Tuesday.
Paul Ross himself made a phone call to this correspondent to explain that the IMF does not have any problem with the imposition of Carbon Surcharge on petroleum products as it is the source of revenue generation in many parts of developing as well as developed countries.
Citing example of Norway, UK and USA, he said that even the oil producing countries imposed taxes on POL products, as it was an energy source that was quite precious and every government wanted to maximize its conservation and efficiency in its usage.
He said that it was the choice of the government to move ahead with imposition of fixed Carbon Surcharge on petroleum products. “If the oil producing as well as oil importing countries are using petroleum products as revenue generation, the IMF does not have any problem if Islamabad imposes fixed carbon surcharge on it,” he added.
Answering another query regarding upcoming review talks to discuss budget 2009-10 in details in Dubai, Paul Ross said that the upcoming talks were due from July 3, 2009. “The upcoming talks will continue for one week,” he said and added that after concluding the upcoming talks the IMF would be in better position to offer any comments on the measures taken by the government in the Budget 2009-10.
However, the official sources in the Finance Ministry said that the upcoming talks between the IMF and Islamabad’s economic managers were quite crucial because on the basis of these talks outcome the Executive Board of the Fund would grant formal approval to the additional credit line of $4 billion standby facility for Pakistan.
“This standby facility of $4 billion will only be used by Pakistan if pledges made by the Friends of Democratic Pakistan (FoDP) are delayed in the next fiscal year 2009-10,” said the official.
The government, the official said, is expecting over $2 billion disbursement from FoDP in order to avoid using the additional facility granted by the IMF in its next executive board meeting which will meet by end July 2009.
“There is gap between the cup and the lip,” said the official while referring to the pledges made by the FoDP in Tokyo for extending over $5 billion to remove Islamabad’s economic woes in the next two years i.e. 2009-10 and 2010-11.
The IMF’s resident chief had already stated yesterday that it was challenge for Pakistan’s economic managers to translate pledges of FoDP into a reality, as Islamabad would have to strive hard to get the desired amount of $2 billion from them in 2009-10.
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ISSN 1563-9479 
