ISLAMABAD, June 16, 2023: The finance ministry said on Friday it was very much interested in negotiating the IMF deal by being flexible on the budget the country recently presented.
The ministry’s response comes after the International Monetary Fund (IMF) expressed its reservations about the budget.
“The document is not part of the pending ninth review that has been delayed since November last year but is keenly engaged with the IMF to reach an amicable solution,” said the ministry.
In a two-page rebuttal of IMF’s Resident Representative for Pakistan Esther Perez Ruiz’s statement on the budget, the ministry said it was clarifying Pakistan’s position. It said the ninth review was conducted in early February 2023 and the government had completed “all technical issues at a fast pace”.
The only outstanding issue, it said, was external financing and it was “amicably resolved” after Prime Minister Shehbaz Sharif spoke to the IMF managing director.
PPP reservations
Pakistan Peoples Party (PPP) on Friday questioned its coalition partner PML-N’s intentions behind presenting an “unrealistic” and “election-oriented budget”.
PPP’s Nafisa Shah, during the budget debate in the National Assembly’s (NA) Standing Committee on Finance and Revenue, said the PML-N-led government had asked the lawmakers to take “tough decisions” in the budget but no such move was taken. “We are faced with an economic storm,” she added.
Committee Chairman Qaiser Ahmad Sheikh lamented that he had even asked for a briefing on the IMF matters but wasn’t given any update. “No action has been taken against banks for not issuing letters of credit to businesses that made containers stuck at ports,” he added.
Elections haven’t influenced budget: Dar
Replying to the PPP claims, Finance Minister Ishaq Dar said had there been no elections, the government would have presented the same budget, adding that the agreement with the IMF took longer than expected. “The government will easily gain 3.5pc GDP growth in the next fiscal year,” he added.
Briefing the committee, he said the FBR had proposed the annual tax target of Rs9,200 billion on scientific basis, adding that the FBR’s target was not “unrealistic”. “Tax target is set according to inflation rate and growth rate,” he added.
The average inflation was 29pc and core inflation was 20pc this year, he said.
He went on to say that tax measures worth Rs233 billion had been proposed in the budget, adding that the government had registered 900,000 tax payers. “It surpassed the target of 700,000,” he added.
A delay in economic survey, he said, caused a delay in drafting budget strategy paper. “The government is prioritising youth, women, IT sector, and SMEs (small and medium enterprises),” he added.
Meanwhile, traders also briefed the session of strangling of 11,000 containers on ports which was followed by Mr Dar’s instructions to present a report.
Mr Dar continued by saying that the government had taken initiatives to stop smuggling which did not result in ending but lessening it. “The authorities have confiscated smuggled sugar of Rs5 billion,” he added.
Highlighting the change in tax over exceptional profits, he said the government would take up to 50pc in taxes over exceptional profit.
The minister went on to say that the government would receive $1billion for China, adding that the country would get the loan it returned. “We have completed negotiations with China over $1billion in loans,” he added. The government was also holding talks with Bank of China, he said, over $300million.