ISLAMABAD: Prime Minister Shehbaz Sharif on Saturday urged officials to make speedy and tireless efforts to make a newly secured $7 billion loan deal with the International Monetary Fund (IMF) Pakistan’s last bailout from the global lender.
The prime minister’s statement came during a meeting of fiscal authorities of the country he presided over in the federal capital of Islamabad.
The meeting came hours after Pakistan reached a staff-level agreement with the IMF for a new $7 billion loan, which is subject to IMF board’s approval.
Sharif congratulated Finance Minister Muhammad Aurangzeb and other officials for their hard work in the recent budget that helped materialize the deal.
“Now is the time that we have to act and act speedily and work tirelessly, only then it would be last IMF program,” he said in televised comments.
“Taxing common people who pay tax, if you will impose further tax on them, [then] it’s a premium for those who don’t pay tax and it’s a penalty for those who are honest taxpayers.”
The deal came weeks after Sharif’s government presented its first budget, aiming to collect Rs13 trillion ($44 billion) in taxes, a 40 percent increase from the last fiscal year.
The government has said that it would ensure an increase in the number of taxpayers in the country from the existing 5 million people who paid taxes.
During the meeting, Sharif asked the Federal Board of Revenue (FBR) chairman to collect even the “last penny.”
“Whatever you need in the public interest, national interest to collect the last penny, which is our due right, I will spend any amount of money to get those gadgetries which are required for this purpose,” he offered.
Islamabad wrangled for months with IMF officials to unlock the new loan announced on Friday, which will be paid out over 37 months.
It came on condition of far-reaching reforms including hiking household bills to remedy a permanently crisis-stricken energy sector and uplifting pitiful tax takings.
More unusual methods have seen the tax authority block 210,000 SIM cards of mobile users who have not filed tax returns in a bid to widen the revenue bracket.
Under the deal “revenue collections will be supported by simpler and fairer direct and indirect taxation including by bringing net income from the retail, export, and agriculture sectors properly into the tax system,” IMF Pakistan mission chief, Nathan Porter, said in a statement.
Islamabad also aims to reduce its fiscal deficit by 1.5 percent to 5.9 percent in the coming year, heeding another key IMF demand.
The IMF said the loan and its conditions should allow Pakistan to “cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth.”
But Pakistan’s public debt remains huge at $242 billion and servicing it will still swallow up half of the government’s income this fiscal year, according to the lender.
PM urges efforts to make new $7 billion loan deal Pakistan’s last IMF bailout
https://arab.news/5u8d4
PM urges efforts to make new $7 billion loan deal Pakistan’s last IMF bailout
- The new loan, spanning over 37 months, is subject to approval by the IMF executive board
- It came on condition of reforms including hiking household bills and expanding the tax net
World Bank president in Pakistan to discuss development projects, policy issues
- Pakistan, World Bank are currently gearing up to implement a 10-year partnership framework to grant $20 billion loans to the cash-strapped nation
- World Bank President Ajay Banga will hold meetings with Pakistan Prime Minister Shehbaz Sharif and other senior officials during the high-level visit
ISLAMABAD: World Bank President Ajay Banga has arrived in Pakistan to hold talks with senior government officials on development projects and key policy issues, Pakistani state media reported on Sunday, as Islamabad seeks multilateral support to stabilize economy and accelerate growth.
The visit comes at a time when Pakistan and the World Bank are gearing up to implement a 10-year Country Partnership Framework (CPF) to grant $20 billion in loans to the cash-strapped nation.
The World Bank’s lending for Pakistan, due to start this year, will focus on education quality, child stunting, climate resilience, energy efficiency, inclusive development and private investment.
"World Bank President Ajay Banga arrives in Pakistan for a high-level visit," the state-run Pakistan TV Digital reported on Sunday. "During his stay, he will meet Prime Minister Shehbaz Sharif and other senior officials to discuss economic reforms, development projects, and key policy issues."
Pakistan, which nearly defaulted on its foreign debt obligations in 2023, is currently making efforts to stabilize its economy under a $7 billion International Monetary Fund (IMF) program.
Besides efforts to boost trade and foreign investment, Islamabad has been seeking support from multilateral financial institutions to ensure economic recovery.
“This partnership fosters a unified and focused vision for your county around six outcomes with clear, tangible and ambitious 10-year targets,” Martin Raiser, the World Bank vice president for South Asia, had said at the launch of the CPF in Jan. last year.
“We hope that the CPF will serve as an anchor for this engagement to keep us on the right track. Partnerships will equally be critical. More resources will be needed to have the impact at the scale that we wish to achieve and this will require close collaboration with all the development partners.”
In Dec., the World Bank said it had approved $700 million in financing for Pakistan under a multi-year initiative aimed at supporting the country's macroeconomic stability and service delivery.
It followed a $47.9 million World Bank grant in August last year to improve primary education in Pakistan's most populous Punjab province.
