Pakistan is debating the financial gap in achieving the underlying deficit.
Islamic:
The International Monetary Fund (IMF) and the Government of Pakistan are at an impasse over a financing gap of Rs 900 billion, a major obstacle in reaching a staff-level agreement, Geo News reported.
The IMF found a larger gap of about 900 billion rupees, or 1% of gross domestic product (GDP).
The IMF is asking to increase the GST rate by 1% from 17 to 18% or impose a 17% GST on Petroleum, Oils and Lubricants (POL) products, Geo News reported.
Meanwhile, Pakistan is disputing the financial gap to achieve the basic deficit. The Pakistani authorities have requested the IMF to combine the reduced flow under the revised Circular Debt Management Plan (CDMP) and reduce the required amount of additional subsidy by Rs 605 billion from the previous target of Rs 687 billion. .
Thus, the financial gap is between 400 billion and 450 billion rupees.
Furthermore, top officials have completely ruled out the possibility of the IMF putting conditions on Pakistan President Tehreek-e-Insaf (PTI) Imran Khan signing on to reinstate the Fund’s program and say there is no meeting. No such discussion took place with the IMF review mission, Geo reported. News.
“Differences still exist in determining the exact financial gap between Pakistan and the IMF review mission during the technical level negotiations. After it is finalized with the IMF, the measures will be taken. Additional taxes will be consolidated, which will be announced through the upcoming mini-report of the budget.Due to the lack of reconciliation on the fiscal gap figure, technical-level negotiations will resume on Monday and then policy-level negotiations are expected to start Tuesday,” the sources confirmed while speaking to a select group of reporters in the background. discussion on Saturday.
In principle, they said, the government had agreed with the IMF to abolish electricity and gas price subsidies for the export-oriented sector because such subsidies were completely unacceptable to the donor. get a loan.
The official said exporters’ plans will be revised by introducing major changes.
The Pakistani authorities acknowledge that the power sector has so far proved to be a major obstacle on the road to achieving smooth sailing.
However, revolving debt for the gas industry remains a dilemma, Geo News reported.
The overspending would breach the overall budget deficit target of 4.9% of GDP, which is likely to hit 6.5 to 7% for the current fiscal year.
Meanwhile, the government is ready to reduce the flood tax on the wealthy segments as well as on imports, impose a tax at 41% on the profits of the banking industry, increase the tax rate of Special Consumption Tax. Federal Reserve (FED) for tobacco, sugary drinks from 13% to 17%, increase the tax deduction rate for real estate transactions, overseas air travel and other transactions.
The IMF assesses that the FBR will face a shortfall of Rs 130 billion to reach its target of Rs 7,470 billion, Geo News reported.
It is expected that both sides will reach a staff-level agreement at the conclusion of negotiations on 9 February. After that, the IMF Executive Board will consider approving the next round, possibly in March 2023.
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
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