November 23, 2002	Saturday	Ramazan 17, 1423

ISLAMABAD, Nov 22: The International Monetary Fund (IMF) is not likely to attach any harsh conditionality with the release of fifth tranche of about $114 million early next year to Pakistan under the Poverty Reduction and Growth Facility (PRGF).

Well-placed sources told Dawn on Friday that the visiting IMF staff team led by Division Chief in the Middle Eastern Department, Klaus Ender during the two weeks of discussions with the Pakistani economic wizards have shown confidence in the growth of major economic indicators.

The sources said that for the first time, the IMF team had not shown any interest in the revenue collection as the revenue target set by the Fund has already been met by the tax authorities.

“We have achieved the tax collection target of Rs124.8 billion set for the first four months of the current financial year. We do not think that the Fund would ask for further items to be brought under the tax net as we are already on track,” a senior official in the CBR told Dawn. He said that the Fund would have asked for bringing more items in the tax net had the revenue collection not had on track.

Official said that the Fund had, however, given more time for bringing about reform in tax administration to make it a friendly organization.

The official said that the Fund has given waiver of around Rs2.5 billion to the tax authorities on the ground that the government had withdrawn the 15 per cent General Sales Tax (GST) on the medicines. And the tax authorities will have to collect Rs458 billion during the current financial year, which could be achieved easily provided other economic indicators registered growth as was projected.

The next waiver was given in the shape of extension of exemption from the GST and reduction of customs duty on import of CNG related machinery and equipments, which was lapsed on October 31 for yet another one year.

According to the official, as the rate of inflation remained under 4 per cent, official foreign reserves reached a record $8.7 billion, the rupee has appreciated, exports surged by 21 per cent over the previous year and economic growth of 4.5 per cent this fiscal year appeared to be attainable.

With these growth in indicators, the understanding reached during the fourth review of Pakistan’s economic programme that was supported under the IMF’s PRGF that no harsh conditionality would be attached with the next tranche.

During the last two years, the IMF had attached harsh conditionalities of imposing GST on urea, all kinds of fertilizers, raising rate of GST from 15 per cent to 20 per cent on more than 200 items; vegetable ghee and cooking oil, medicines later withdrawn, firstly levy withholding tax on National Saving Certificates (NSC) and finally reduced the limit of withholding tax on it.