IMF keeps Pakistan off agenda until September 13

ISLAMABAD: The International Monetary Fund (IMF) has not yet scheduled a discussion on Pakistan’s request for financial assistance in its upcoming executive board meetings, which are planned until September 13.

According to the IMF’s website, meetings are scheduled for September 4, 6, 9, and 13, but Pakistan’s 37-month Extended Fund Facility (EFF) worth approximately $7 billion is not on the agenda.

Pakistan had reached a staff-level agreement with the IMF on July 12 for a 37-month EFF, which is valued at around SDR 5,320 million (roughly USD 7 billion).

However, this agreement still needs the approval of the IMF’s Executive Board. The approval is also contingent on Pakistan securing necessary financial commitments from its development and bilateral partners.

To meet these conditions, the Pakistani government is reportedly working to secure the rollover of $12 billion in loans from key allies, including China, Saudi Arabia, and the United Arab Emirates (UAE). Additionally, Pakistan has requested an extra $1.2 billion loan from Saudi Arabia to cover a $2 billion financing gap.

On the domestic front, the government has assured that the Federal Board of Revenue (FBR) is on track to meet its tax collection targets through increased digitalisation and stricter enforcement. Authorities have emphasised that every sector must contribute to the tax base for the country’s development.

However, there are currently no plans to increase withholding taxes, despite concerns about potential hikes.

The government also clarified that exempting traders from income tax would unfairly shift the tax burden onto salaried individuals and the manufacturing sector.

Read next: FinMin says IMF has no issues with Pakistan providing targeted subsidies