IMF Sets These “Tough” Conditions For Pak If It Wants Billion Dollar Aid
The International Monetary Fund (IMF) has given “tough conditions” for cash-strapped Pakistan to agree if it wants to bag billions of dollars in aid, Pakistan’s Prime Minister Shehbaz Sharif has said.
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The IMF after a successful ninth review of Pakistan’s economy will give over $1.1 billion. This would also pave the way for bilateral loans from other nations and institutions. The IMF wants Pakistan to take measures to increase government revenue.
The IMF will share nine tables on macroeconomic and fiscal frameworks with the Pakistani authorities. If they come to an agreement by February 9, they will sign a staff-level agreement.
Pakistan will have to take some difficult decisions to ensure the IMF is satisfied with the country’s handling of the economic crisis before the global lender can be comfortable to send the money.
The IMF expects Pakistan to take steps to fill the massive fiscal gap, The News International newspaper reported quoting unnamed sources.
One proposal is to increase petroleum levy by 20-30 rupees a litre. This would push up the current 50 rupees to 70-80 rupees, the newspaper reported.
Another consideration is to charge 17 per cent goods and services tax (GST) on petroleum, oil and lubricant (POL) products. “… Or increasing the GST rate by 1 per cent from 17 to 18 per cent through a presidential ordinance,” the newspaper reported quoting unnamed sources.
Pakistan may consider raising the federal excise duty rate on sugary beverages up to 17 per cent from 13 per cent through a mini-budget.
The Federal Board of Revenue of Pakistan has suggested raising excise duty on cigarettes.
The revenue board has asked for information about assets of “civil servants” from grades BS-17 to BS-22. This information will be shared between the Federal Board of Revenue and banks. BS-17 to BS-22 have a relatively higher pay then grades below them.
Pakistan’s central bank on Friday said its foreign exchange reserves have dropped by 16.1 per cent to $3.09 billion at the end of the last fiscal week, the lowest in nearly 10 years.