ISLAMABAD, Feb 19: Pakistan would make a formal request to the International Monetary Fund (IMF) next month for an additional loan of $4.5 billion, Adviser to Prime Minister on Finance and Revenue Shaukat Tarin said on Thursday.

“I will visit the Washington offices of the IMF in March to make a formal request for more loan. The loan will be considered on the basis of the performance of Pakistan’s economy being under review in Dubai,” Mr Tarin said while replying to a question after formally launching the Medium Term Budgetary Framework (MTBF), a new fiscal exercise for budget preparation.

He said that Pakistan needed financial support to improve its reserves and to help enhance its credit rating.

Mr Tarin said the government would be issuing term finance certificates (TFCs) to resolve the issue of circular debt of the power sector. It is expected that the TFCs worth Rs80 billion would be launched by the end of this month.

He said the European Union and the United States should grant Pakistan open market access to Pakistani products as compensation for the huge losses caused by the war on terror.

He said terrorist attacks had severely affected the country’s economy and were keeping potential investors away.

The EU and the US, he said, had granted market access to least developed countries and Balochistan and the tribal areas being less developed than the least developed countries deserved special Reconstruction Opportunity Zones. Mr Tarin said that tax collection shortfall had increased in January from Rs22 billion by the end of December, adding that the government had filled the gap through alternative resources to meet IMF conditions.

“We have not asked IMF for any waiver on any of its conditions,” Mr Tarin said.

He said the government was not reviewing any proposal to empower the Federal Board of Revenue to collect property tax and end exemptions on property tax. However, he said, all exemptions and subsidies, except on food, should be ended.

He said that Britain’s Department for International Development had sponsored the Medium Term Budgetary Framework, which had been implemented by the federal government to improve operational efficiency of ministries.

Mr Tarin said the new budgetary framework was a paradigm shift and it would terminate the decisive say of the ministry of finance in the budget-making process.

He said the role of cabinet in the budget-making process would be enhanced and it would be involved during budgetary allocations in September-October, February-March and before the presentation of the federal budget.

Under the MTBF, he said, there would be a single ceiling for ministries for the development and non-development budget. Therefore, he added, there would be no separate PSDP allocation.