‘IMF concerned over budget expenditures, taxes’

Islamabad:  Minister of State for Finance Ayesha Ghaus Pasha has said that the International Monetary Fund (IMF) has sought clarification on certain aspects of the budget and expressed concerns over expenditure and taxes.

Speaking at a press conference in Islamabad, Pasha said that the IMF has raised numerous questions that led to a virtual conversation between Finance Minister Ishaq Dar and IMF Mission Chief Nathan Porter.

“The IMF has sought clarification on various aspects of the budget, particularly concerning expenditure and taxes. We have provided the IMF with information regarding the budget’s strategy and vision,” she said.

Pasha said that the IMF has acknowledged the budget’s objective of stimulating economic growth but stressed the ongoing high-level discussions with the international lender.

The minister of state further elaborated that more technical discussions with the IMF would cover additional data, including expenditures. “Meetings would also be held between the IMF and officials from the Power Division and the State Bank of Pakistan will discuss the exchange rate and policy rate with the international lender.

Pasha emphasized that the government’s primary focus was on economic stability. She clarified that no decision had been made yet regarding an increase in the petroleum levy, as the law allowed for flexibility. “The government would adjust the petroleum levy rate if necessary, aiming to maintain stability in the sector,” she said.

Earlier, during a meeting of the Senate Standing Committee on Finance, senior officials from the Ministry of Finance informed lawmakers that the IMF had expressed dissatisfaction with the budget for the upcoming fiscal year. The IMF had deemed the target for tax collection insufficient and called for an increase in the petroleum levy, the committee was told.

In their briefing to the Senate Standing Committee on Finance, finance ministry officials revealed that the IMF had demanded an increase in the petroleum levy from Rs50 per litre to Rs60 per litre.

The concerns raised by the IMF regarding the budget reflect the ongoing discussions and negotiations between the Pakistani government and the international financial institution as they work towards aligning their goals for sustainable economic growth.