KARACHI: The International Monetary Fund (IMF) has raised several issues with the budget for FY24, tabled by the government in the National Assembly last week, but said the lender remains ready to work with Pakistan to refine the draft ahead of its passage, Dawn.com reported.
The statement comes a day after Minister of State for Finance Aisha Ghaus Pasha said that discussions with the Fund were moving forward.
A day before the tabling of the budget, IMF Resident Representative for Pakistan Esther Ruiz Perez had said that the country needed to satisfy the IMF on three counts, including the budget for the upcoming fiscal year, before its board will review whether to release at least some of the $2.5 billion pending disbursement under the 2019 Extended Fund Facility (EFF) that will expire at the end of this month.
In a statement released late on Wednesday, Ms Perez said the new tax amnesty scheme proposed by the government in the budget sets a “damaging precedent” and runs against the programme’s conditionality. The statement did not specify which particular scheme the fund was taking issue with.
The statement also notes that the draft FY24 budget “misses an opportunity to broaden the tax base in a more progressive way, and the long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable BISP recipients and development spending”.
She further said that measures to address the energy sector’s liquidity pressures could be included alongside the broader budget strategy.
The IMF official had earlier pointed out that the lender only had time for one board meeting before the current programme ends.
With reserves at critical levels for the past several months, Pakistan was expected to get around $1.2 billion from the IMF in October last year as part of the EFF’s ninth review.
But almost eight months later, that tranche has not materialised.
Published in Dawn, June 15th, 2023
