During the negotiations with the government of Pakistan on a $7 billion loan program, the Board of Revenue’s tax shortfall and $2.5 billion external financing were the main topics of the IMF.
In addition, the Punjab government’s new agricultural income tax law is also not fully consistent with the national fiscal package. However, Punjab’s Information Minister Bukhari denies this. She says that the newly amended Punjab law is fully consistent with the national fiscal package.
Unlike Sindh, the Punjab government has legislated in this regard. As far as the external financing gap is concerned, the Pakistani government has once again contacted China and Saudi Arabia. Pakistan is keen to buy oil from Saudi Arabia on credit or deferred payments. Pakistani officials say that after the talks were completed, the IMF has not yet issued any final decision on its part regarding the tax shortfall and external financing. A delegation of the international organization will go to Washington and send a questionnaire after consulting its headquarters.
The international organization is also concerned about the delay in the privatization of power distribution companies. It is also demanding an amendment to the Pakistan Sovereign Fund Act by December. It also wants to change the definition of the circular debt of the gas sector.
It is demanding monthly reporting of electricity and gas circular debt, which the Power and Petroleum Divisions are not yet monitoring regularly. The IMF has also identified some shortcomings in the implementation of the national fiscal package. This package has been signed by all five finance ministers. Its aim is to equalize income tax rates and shift the burden of some expenses to the provinces.
