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Thursday February 29, 2024

IMF demands on power sector reforms being worked out: Ishaq Dar

Ishaq Dar said the government was taking action for narrowing down the path for the revival of IMF programme, including making efforts to erase the circular debt of energy sector and taking additional taxation measures without further burdening the general masses

January 12, 2023
Minister for Finance Ishaq Dar. AFP
Minister for Finance Ishaq Dar. AFP 

ISLAMABAD: Minister for Finance Ishaq Dar has said the government was taking action for narrowing down the path for the revival of IMF programme, including making efforts to erase the circular debt of energy sector and taking additional taxation measures without further burdening the general masses.

When asked about the IMF mission that was supposed to come within a few days, no answer was given on the exact schedule of the IMF mission.

However, Dar, in a statement, said the IMF’s demands on account of power sector reforms were being worked out. He said the circular debt of the gas sector went up at an extra speed. Now the government, he said, has worked out a plan to utilise dividends of gas companies to reduce the circular debt of the gas sector. He said the government was working on a comprehensive plan but there would be no burden on the masses.

On the taxation front, he said the FBR achieved its first five months’ target but a high court granted a stay order in a case of 10 percent tax due to which the Board had a shortfall in December 2022. Dar said that due to additional unbudgeted subsidy requirements, the government was considering announcing additional taxation measures but it would be done in such a way that it would not burden the general masses.

However, credible sources said that the IMF team held virtual talks with the FBR high-ups and sought details of the revenue collection in the second half of the current fiscal year. The FBR’s working shared with the IMF showed that the tax machinery could fetch Rs7,300 billion against the set target of Rs7,470 billion, so the net shortfall in revenues was projected to stand at Rs170 billion. But the IMF did not agree to this projection and argued that the FBR’s revenue collection would be standing on the higher side than the projected figure. If the Pakistani authorities and IMF remain unable to strike staff level agreement in next 10 to 15 days, then the pending 9th and 10th reviews would have to be clubbed because then the official data of end of December 2022 targets would be available.