ISLAMABAD: Soon after the completion of all prior conditions set by the International Monetary Fund for the revival of the $7bn bailout programme, Finance Minister announced that the Board of China Development Bank (CDB) on Wednesday approved a $700 million credit facility for Pakistan hoping inflows from other multilateral lenders and friendly countries.
Mr Dar said the amount expected to be received this week will shore up the State Bank of Pakistan’s (SBP) foreign exchange reserves which have dwindled to $3bn, not sufficient to even cover three weeks of controlled imports.
Pakistan is required to build its forex reserves to a minimum of $10bn to cover the import bill of two months. Pakistan expects inflows from China, Saudi Arabia and UAE soon after the signing of the staff-level agreement.
A well-placed source told Dawn that Pakistan and IMF will sign the staff-level agreement on Feb 28. This will be followed, according to the source, by the IMF executive board meeting expected in the first week of March.
In compliance with the last condition of the IMF, the Prime Minister Secretariat sent the Finance (Supplementary) Bill 2023 to the President Secretariat on Wednesday evening for assent. However, the bill was sent with a delay of two days after the National Assembly passed it on Feb 20.
A spokesperson for the president confirmed to Dawn that the bill was received on Wednesday evening.
Under Article 75 (1), the president has no power to reject or object to the finance bill, which is considered to be a money bill as per the constitution.
The article reads “When a Bill is presented to the President for assent, the President shall, within [ten] days,–(a) assent to the Bill; or (b) in the case of a Bill other than a Money Bill, return the Bill to the Majlis-e-Shoora (Parliament) with a message requesting that the Bill or any specified provision thereof, be reconsidered and that any amendment specified in the message be considered”.
Meanwhile, US Ambassador to Pakistan Donald Blome called on Finance Minister Ishaq Dar on Wednesday.
An official announcement said that Mr Blome underscored that both countries enjoy good relations and expressed confidence in the policies and programmes of the Pakistani government for economic sustainability and socio-economic uplift of the masses.
He extended his support to further promote bilateral economic, investment and trade relations between the two countries. Mr Dar thanked the US ambassador and reiterated the desire of his government to further deepen bilateral trade and investment ties with the USA.
The two sides exchanged views on matters of common interest and enhance the existing bilateral relations between both countries, added the announcement.
Before the presentation of the bill in the parliament on Feb 15, the government had already implemented Rs115bn worth of taxes through two notifications issued on Feb 14. Now, after formal assent by President Arif Alvi, the remaining Rs55bn tax measures would come into effect.
Soon after assent, the Federal Board of Revenue (FBR) will effect an increase in general sales tax from 17pc to 25pc on more than 800 items mostly food, cosmetics and other non-essential imported items. The FBR will issue SROs to implement the remaining measures.
A new clause introduced through the finance bill has empowered the federal government (cabinet) to charge goods at a higher GST rate on retail level (Third schedule) without the parliament approval. Before this amendment, this power existed with the parliament.
Published in Dawn, February 23th, 2023