Quitting IMF Program Not Possible Now: Pakistan Finance Minister

ISLAMABAD — Pakistan has indicated the nation cannot come out of the International Monetary Fund program and agreed to review the Federal Board of Revenue’s powers of arresting taxpayers in consultation with senators.

“It is not possible to get out of the International Monetary Fund program at this time,” Pakistan Finance Minister Shaukat Tarin said.

“We were forced to go to the International Monetary Fund. This time, the International Monetary Fund was not friendly with us, and the program was front-loaded and tough.”

International Monetary Fund and Pakistani authorities have agreed to continue talks to narrow down differences. Still, the International Monetary Fund-sponsored program has been put on halt as the international moneylender conveyed that the sixth review under the Extended Fund Facility will be accomplished in September instead of July 2021.

Tarin’s comment came during his discussion with the Senate Standing Committee on Finance in Parliament House. The meeting was held under the committee’s head, Senator Talha Mehmood’s, chairmanship.

Tarin assured that the government would change the language of the proposed Income Tax Ordinance Article 203-A on the powers of taxpayers to make arrests and remove all objections. Earlier, the committee unanimously denied the Federal Board of Revenue the powers of arrest.

The minister informed the committee that the government estimates the economy to grow by 7 percent by 2023 when the country goes for new elections with a 5-5.5 percent projection for the upcoming 2021-22.

The opposition party blames the Imran Khan-led government and says the 2021-2021 budget was filled with the International Monetary Fund-recommended tax measures against the poor and will increase consumer inflation.

Earlier this week, Tarin presented the budget for 2021-2022.

The committee strongly opposed the government’s decision to increase the sales tax on gold, diamonds, and gemstones, as well as on dairy, bricks, aircraft, plants, and machinery, import of aircraft and spare parts, removal of the exemption from LED lamps, cotton seeds, soybean meal, soybean seeds, raw cotton, cotton gin, plant, machinery, packaged flavored milk, cream, yogurt, poultry machinery, and many other items.

Member Policy Federal Board of Revenue informed the committee that the government had abolished all reduced sales tax rates on non-essential and luxury items, taking undue advantage of the concessionary sales tax regime.

As per reports by the International Monetary Fund, the Executive Board completed the Second, Third, Fourth, and Fifth Reviews of the Extended Fund Facility for Pakistan in March.

Pakistan’s 39-month Extended Fund Facility arrangement was approved by the Executive Board on July 3, 2019, for about $6 billion at the time of approval of the agreement, or 210 percent of quota.

“The program aims to support Pakistan’s policies to help the economy and save lives and livelihoods amid the still unfolding Covid-19 pandemic, ensure macroeconomic and debt sustainability, and advance structural reforms to lay the foundations for strong, job-rich, and long-lasting growth that benefits all Pakistanis,” states the report.

“The Pakistani authorities have continued to make satisfactory progress under the Fund-supported program, which has been an important policy anchor during an unprecedented period. While the Covid-19 pandemic continues to pose challenges, the authorities’ policies have been critical in supporting the economy and saving lives and livelihoods.”

(With Inputs from ANI)

(Edited by Saptak Datta and Amrita Das)