Govt-IMF talks today: Rs200 bn new taxes, hike in power, gas tariffs to be on table

ISLAMABAD: The dialogue between Pakistan and the visiting delegation of the International Monetary Fund will be held today (Monday) after the break of two days.

It is likely that imposition of new taxes worth Rs200 billion will be discussed and the government will have to take decision to hike power and gas tariffs to eliminate subsidies for crucial ease of monetary pressure on the government.

The policy level talks would also determine revised tax revenue target of the Federal Board of Revenue (FBR). The meeting will also take up measures letting regulatory bodies, Nepra and Ogra work independently.

The IMF will also be provided details of loss making institutions and roadmap will be given for their privatisation. New slabs for power sector are likely to be introduced. Amid growing concerns over the record inflation and its impact on the masses, the PTI government has told the International Monetary Fund (IMF) that the steps taken in this regard would stablise the food prices in the coming months.

Meanwhile, Minister for National Food Security and Research Khusro Bakhtiar said the government was taking all the necessary measures for the management of food inflation. “A bumper wheat crop is expected this year and there will be no issue of wheat supply in coming months,” Bakhtiar told the IMF staff mission during a meeting.

The mission is currently on a visit to Pakistan to review the economy’s performance in line with the conditions related to the Fund’sloan programme. The successful review would pave the way for release of third tranche under the $6 billion extended fund facility.

Senior officials from the ministries of food, finance and State Bank of Pakistan were also present during the meeting. Prime Minister Imran Khan on Saturday said his government will go to any extent to provide relief to masses and check price hike of essential commodities.

He expressed these views while chairing a meeting of his economic team with reference to key commodities’ prices, including flour, sugar, cooking oil and rice. The meeting took stock of the steps for bringing prices of these items down under the premier’s directions.

Those in attendance were Adviser to PM on Finance Dr Abdul Hafeez Shaikh, Minister for Economic Affairs Division Hammad Azhar, Special Assistant to PM Dr Sania Nishtar, Minister for Maritime Affairs Ali Zaidi, PTI leader Jahangir Tareen, Shahbaz Gill and USC chairman.

Meanwhile, Pakistan Bureau of Statistics (PBS), citing estimates of various researchers, said January inflation was around 13 per cent, whereas the actual inflation compiled by it was 14.6 per cent, “more than what was estimated”.

“The inflation is higher because the prices were collected during the peak of the price surge in mid of the month,” it said in a statement. “It (PBS) followed standard operating procedures regarding time schedule for data collection.”

PBS denied an impression that inflation figure was understated, saying the institution is unbiased towards compilation and publication of price statistics. The bureau said it collects real-time prices data based on android technology equipped with global positioning system and monitored at different levels.

The prices data collection, validation and publication are well synchronised with best global standard classification of individual consumption by purpose. It compiles data without any political intervention or motivation and transparency is ensured regarding city-wise price data. “Therefore, fudging of the data is not possible,” it added.