Pakistan’s IMF loan programme at risk as IMF requirements remain unfulfilled

Pakistan’s seven billion dollar loan programme has fallen into jeopardy as the country fails to fulfil the requirements of the International Monetary Fund (IMF), journalist Shahbaz Rana revealed on October 31.

Rana said that IMF had directed the Pakistan government to collect around PKR 13,000 billion in taxes for the ongoing fiscal year.

Federal Board of Revenue (FBR) has failed to collect the targeted tax for the first quarter (July to September), leaving PKR 90 Billion tax shortfalls despite securing advance taxes from several companies, he added.

As per the IMF’s direction, the Pakistani government was only able to collect 10 lac rupees from the traders for the first quarter of the year instead of the IMF-described target of PKR 10 billion rupees.

Chief Minister (CM) Punjab Maryam Nawaz’s subsidizing in the province has been directly or indirectly impacting the IMF loan programme, Shahbaz Rana maintained.

Earlier, the Punjab CM had announced a 14 rupees electricity unit subsidy for two months in the province by cutting the development budget.

Journalists also observed that during the ongoing second quarter (October to December), the government might again fail to collect the targeted tax and may face a PKR 300-350 billion shortfall.

The government will face more than PKR 400 Billion tax shortfall in the first six months of the three-year loan programme, which will definitely impact the IMF programme’s longevity, Rana predicted.

All provinces failed to achieve a total cash surplus budget of PKR 342 Billion, achieving PKR 160 Billion for the first quarter.

Furthermore, the IMF again urged Pakistan to allow a further devaluation of the rupee, despite Pakistan’s Deputy Prime Minister Ishaq Dar’s belief that the currency has already been devalued by at least 16 per cent, Rana concluded.