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June 10, 2021

Govt-IMF talks still inconclusive

 
June 10, 2021

ISLAMABAD: Pakistan and the IMF have so far remained unable to narrow down their differences and both sides decided to continue talks till approval of the upcoming budget 2021-22 from Parliament.

The Special Assistant to Prime Minister on Finance and Revenues Dr Waqar Masood possessed capabilities to remain IMF engaged and he had played a key role in avoiding breaking down the highly complex and difficult negotiation process.

The bargaining continues so the government decided to come up with an announcement of a budget and then both sides will continue their engagement to strike consensus, said the official.

When contacted to SAPM on Finance and Revenues Dr Waqar Masood on Wednesday and inquired about conclusion of talks with the IMF, in his brief reply, he said, “not yet”. Now the budget documents are almost finalised and now in the process of printing of budget copies but so far Pakistani authorities and the IMF sides could not evolve consensus on budgetary targets for next fiscal year. “The talks are underway with this understanding that efforts will continue to evolve consensus but if it did not happen within the stipulated timeframe then the negotiation could continue till approval of the budget from Parliament,” said the official sources. The changes in Ministry of Finance with removal of former Secretary Finance Kamran Afzal also complicated ongoing talks with the IMF and now Dr Waqar Masood is playing a catalyst role in making any breakthrough in these ongoing talks.

The government has decided to keep revenue surplus on the higher side and also pitched non-tax revenue on the higher side mainly because of spectrum auction and selling out RLNG plants. It is also the wish of the government to include Petroleum Levy as part of FBR collection without inserting it into federal divisible pool (FDP) under NFC mechanism.

The deadlock persisted over different issues including fixation of petroleum levy, FBR’s tax collection target and assessment of elimination of tax exemption, exact timeframe for hiking of power and gas tariff and autonomy to the regulators such as SBP and Nepra with approval of Parliament.