IMF demands ‘strict action’ to bridge growing fiscal gap

ISLAMABAD: The International Monetary Fund (IMF) has asked the Pakistani authorities to take strict action for filling a yawning gap on account of fiscal slippages in order to restrict the primary deficit within the envisaged limits.

Pakistan and the IMF high-ups held deliberations over the mode of proposed additional taxation measures through the mini budget and discussed the possibility of its smooth sailing.

Both sides kick-started talks for accomplishing the 9th Review under the $7 billion Extended Fund Facility here on Tuesday. The IMF side raised the possibility of upcoming Presidential Ordinance landing at the higher judiciary, which might jeopardise extra tax revenues.

So the government was asked to explore the possibility of taking additional measures in the shape of a finance bill with the approval of parliament. If this happened, then the opposition might resist its timely approval in a smooth manner, said the IMF side.

Minister for Finance Ishaq Dar replied that the Presidential Ordinance would be ultimately laid down before the parliament and they believe in the supremacy of parliament. So the ordinance would be promulgated and eventually they would seek approval of parliament in the shape of a bill.

“We will evolve a consensus on these taxation measures within the parliament through dialogue,” Dar assured the IMF.

According to an official announcement made by the Ministry of Finance, Minister for Finance and Revenue Senator Muhammad Ishaq Dar held a meeting with the IMF Review Mission, led by Chief Nathan Porter, at the Finance Division on Tuesday.

Esther Perez Ruiz, IMF resident representative, Minister of State for Finance and Revenue Dr Aisha Ghous Pasha, SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, Governor State Bank of Pakistan Jamil Ahmed, the secretary finance, chairman FBR, members of IMF delegation and senior officers from the Finance Division attended the meeting. The meeting reviewed the economic and fiscal policies and reforms agenda to accomplish the 9th Review under the Extended Fund Facility.

Finance Minister Senator Ishaq Dar welcomed the delegation and shared long-standing friendly relations with the IMF. He briefed the IMF Mission on fiscal and economic reforms and measures being taken by the government in different sectors, including bridging the fiscal gap, exchange rate stability and in the energy sector for the betterment of economy.

He said that reforms are being introduced in the power sector and a high-level committee had been formed to devise modalities to offset the menace of circular debt in the gas sector.

The finance minister also extended gratitude to the IMF managing director on continuation of talks and shared that as the finance minister, he had successfully completed the IMF programme in the past and that the government was committed to completing the present programme. He further extended all his support to the IMF Mission and committed to working together for reaching an agreement to complete the 9th Review under the Extended Fund Facility (EFF). Nathan Porter, IMF Mission Chief, expressed his confidence that the government will meet the IMF requirements for the completion of the 9th Review and hoped that Pakistan would continue towards its progress on the reforms in various sectors and complete the IMF programme within time effectively. He further added that the IMF and Pakistan will be working together on fiscal reforms.