ISLAMABAD: Just days after Pakistan presented its federal budget for the next fiscal year, Finance Minister Shaukat Tarin denied there was any “disagreement” with the International Monetary Fund (IMF) on restructuring targets and austerity measures, adding that a $6 billion loan program from the fund would continue.
Train on Friday presented what has been called a “pro-growth” and “people-friendly” fiscal budget for 2021-22, with a total outlay of Rs8.4 trillion.
Pakistan is currently in talks with the IMF as part of the sixth review of a 39-month bailout program, which began in 2019. The revenue target has been a key topic and Tarin has said the IMF and the government debated ways to achieve the target, which is 23 percent higher than the current year’s expected collection.
The budget document said one of the main objectives was to pursue the IMF program, even as Pakistan has said it is looking for the easing of some restructuring targets.
“We don’t have a disagreement with the IMF, we want to remain in the IMF program and our destiny is the same,” Tarin said in an interview with a private Pakistani news channel on Monday night.
The finance minister said the IMF wanted Pakistan to reform its power sector, increase revenue base, eliminate all exemption and increase taxes on personal incomes by Rs150 billion.
“We disagree on this and told them we will broaden [tax base], will use technology and include more taxpayers [in the tax net],” Train said, adding that Pakistan had informed the IMF that it wanted “systematic and sustainable growth” by introducing innovation and technology.
“[IMF] said they will continue to talk on this with [Pakistan], and the steps, innovations that you [Pakistan] are introducing will be monitored for next two, three months and [IMF will] take it from there,” the finance minister said, adding: “I assure you that it is our aim and the IMF also desires that we will not come out from [the IMF] program. We will come up with some understanding.”
Train said he hoped Pakistan would be able to convince the IMF of the government’s roadmap to reform the power sector and broaden the tax net.
