IMF mission encouraged by 'shared thinking at federal and provincial levels' on fiscal matters

Updated May 04, 2019

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IMF Mission to Pakistan led by Ernesto Ramirez Rigo (centre) exchanged views with provincial and federal government representatives on the prevailing fiscal situation, May 4, Islamabad. — Photo courtesy Ministry of Finance
IMF Mission to Pakistan led by Ernesto Ramirez Rigo (centre) exchanged views with provincial and federal government representatives on the prevailing fiscal situation, May 4, Islamabad. — Photo courtesy Ministry of Finance

The IMF mission to Pakistan led by Ernesto Ramirez Rigo was heartened by the "shared thinking at the federal and provincial levels" as views were exchanged on Saturday between the mission and senior government officials on the existing fiscal situation of the country, a statement issued by the Ministry of Finance said.

Adviser to the Prime Minister on Finance, Revenue & Economic Affairs Dr Abdul Hafeez Shaikh, Sindh Chief Minister Murad Ali Shah, and the finance ministers of Punjab, Khyber Pakhtunkhwa, and Balochistan participated in the discussions with the IMF team in Islamabad within the context of the Fund bailout programme currently under negotiations.

"The mission was apprised that the federal and provincial governments were constantly engaged on fiscal matters and the National Finance Commission (NFC) and the Fiscal Coordination Committee (FCC) forums were being used for ensuring maximum cooperation and coordination among the federal and provincial fiscal authorities," read the finance ministry statement.

According to the statement, the provincial finance ministers also apprised the mission of the various initiatives taken in their respective jurisdictions to mobilise resources at the sub-national level in order to meet the increasing developmental and social spending needs.

The ministers revealed that revenues from taxation had seen a marked improvement recently and that expenditures were being managed prudently for better fiscal outcomes, according to the ministry handout.

"They (the ministers) assured the mission that the provincial governments would support and complement the efforts of the federal government to adhere to the fiscal framework being discussed with the Fund," it added.

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The statement noted that the IMF mission was encouraged by the shared thinking at the federal and provincial levels and that mission chief Rigo "appreciated the updates provided by the provincial governments".

In his discussion with the provincial and federal governments representatives, Rigo highlighted the importance of a "harmonised system of taxation that would contribute towards increasing economic activities and business growth in the country", the press release noted.

PTI following our policy: Sindh CM

During a brief conversation with reporters following the discussions, Chief Minister Shah said that separate meetings had taken place between government officials and the IMF delegation, and between provincial government officials and finance adviser Dr Shaikh.

The chief minister stressed the need for the federation to bring improvements in its collection of taxes. He added that Dr Shaikh had acknowledged the pressure on provincial governments due to insufficient tax revenues.

Shah said that Sindh's revenue collection had seen some improvement and that the other provincial representatives had reported the same to the IMF mission chief regarding tax revenues in their respective provinces.

He conceded that things will improve when there is a revival in the presently sluggish economy. "When these things will improve, only then can tax collections witness an increase," he said.

Asked by a reporter to comment on the appointment of "a World Bank representative in the finance ministry" and rumours that someone who had worked under the IMF will be appointed as the new governor of the State Bank of Pakistan, Shah said: "This all falls within the domain of the federal government. Hafeez (Shaikh) served as an adviser on finance and later minister for finance as well during our (PPP) tenure. PTI is following our policy."