Prime Minister Shehbaz Sharif asserted on Tuesday that Pakistan’s fragile economy necessitates another loan program from the International Monetary Fund (IMF) to achieve stability, as reported by a source.
Addressing a ceremony in Islamabad aimed at encouraging taxpayers, PM Sharif emphasized the government’s obligation to initiate a new IMF deal to ensure stability. However, he also highlighted the government’s commitment to promoting growth, job creation, and tackling inflation alongside the IMF program.
Sharif outlined the government’s strategy, emphasizing collaboration between federal and provincial authorities to create favorable conditions for the private sector. He noted that significant refunds amounting to sixty-five billion rupees have been issued to exporters and pledged timely refunds in the future. Additionally, measures to provide competitive electricity rates to industries to enhance productivity were promised.
The establishment of the Special Investment Facilitation Council (SIFC) and the continuation of the second phase of the China-Pakistan Economic Corridor (CPEC) were highlighted as efforts to boost investment.
Regarding tax reforms, Sharif announced plans for a complete restructuring of the Federal Board of Revenue (FBR) and the hiring of consultants for the digitalization of tax collection processes. He emphasized the need to expand the tax base to improve the low tax-to-GDP ratio.
Acknowledging the contribution of leading taxpayers and exporters, Sharif announced that awardees at the ceremony would receive blue passports.
These remarks come in the wake of Pakistan’s negotiations with the IMF, with a staff-level agreement reached, pending approval from the IMF’s executive board. The agreement would release the final tranche of USD 1.1 billion under an existing USD 3 billion standby arrangement.
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Notably, Pakistan had to fulfill IMF conditions, including revising its budget, raising interest rates, and generating revenue through increased taxes and utility prices ahead of the stand-by arrangement.
Furthermore, the IMF confirmed Pakistan’s pursuit of a 24th medium-term bailout package to enact longstanding structural reforms, as reported by Dawn. This confirmation came alongside the announcement of the staff-level agreement, enabling Pakistan to access around USD 1.1 billion by late April, subject to board approval.
