The IMF’s $6 billion loan programme and the delivery of the next $1 billion tranche have been halted again, according to reports that the Fund has imposed strict requirements on Pakistan’s state institutions.
Pakistan has also been pushed by the International Monetary Fund (IMF) to levy additional taxes and eliminate loopholes.
The negotiations will go on for another week, but Shaukat Tarin will not return to Washington.
The IMF imposed more stringent restrictions, including requiring the government to close accounts held by several public sector companies in commercial banks.
The government has also been directed to open a single Treasury Account with the State Bank of Pakistan (SBP) and increase transparency in transactions for coronavirus vaccinations, medications, and relief monies distribution.
Pakistan has already agreed to several of the IMF’s demands, such as boosting power costs and increasing petroleum product prices, in exchange for the next $1 billion tranche.
Furthermore, the government has been requested to impose a 17 percent General Sales Tax (GST) after introducing proper legislation in parliament for the imposition of a standard sales tax and the elimination of all exemptions, tax holidays, and incentives.
Several government sector firms, including NHA, OGDCL, the petroleum division, and the military ministry, are said to have hundreds of accounts in commercial banks, holding billions upon billions of rupees, according to reports.
The foreign donor also encouraged the government to use GST changes to increase the revenue base.
The IMF’s $6 billion loan programme and the delivery of the next $1 billion tranche have been halted again, according to reports that the Fund has imposed strict requirements on Pakistan’s state institutions.
In addition to pushing the government to implement a 17 percent standard sales tax, the IMF urged the government to improve the country’s loan management system by recommending the establishment of a centralised debt management agency.
The new IMF requirements included a reduction in income tax slabs, a tax credit, and a reduction in allowances.