KARACHI: A top International Monetary Fund official confirmed on Friday Pakistan had resumed preliminary talks with the global lending agency for the completion of the sixth review of a loan program, as people privy to the negotiations said the Fund wanted the country to increase its revenue collection target by about Rs250 billion.

Pakistan secured an IMF bailout package of $6 billion in 2019 and completed the first five reviews under the program until March this year.

The sixth review has remained pending since June, and its successful completion is likely to result in the release another tranche of $1 billion.

“The IMF team, at present, is engaged with our Pakistani counterparts on conducting discussions,” Teresa Dabán Sanchez, the IMF country head in Pakistan, told Arab News. “We stand ready and look forward to our continued discussions with the Pakistani authorities on a set of policies and reforms that could form the basis for the completion of the 6th review under the EFF [Extended Fund Facility].”

People familiar with the IMF talks say the Fund has been asking Pakistan to enhance its tax collection target by increasing energy tariffs.

“Two things are high on the agenda,” Dr. Vaqar Ahmed, joint executive director at the Sustainable Development Policy Institute, told Arab News. “The IMF wants Pakistan to add at least Rs250 billion more to its revenue target for the current year. Apart from that, it believes that the recent hike in the power tariff is not enough and should be enhanced further. The IMF team also wants another gas tariff hike before the onset of winter.”

Pakistan has set Rs5.83 trillion of revenue collection target for the current fiscal year which will go beyond Rs6 trillion if the government implements the IMF conditions.

Ahmed pointed out, however, the government could find it “politically tough” to impose further taxes on people.

Pakistan’s finance minister Shaukat Tarin, who took over in April this year, said he was a staunch opponent of a hike in power tariffs or personal taxes.

“The government was not willing to show much flexibility to the IMF over these issues recently, but things have changed in the last couple of weeks since the rapid fall of Pakistan’s national currency,” Ahmed continued. “Now the government is clear that it needs the IMF and will not be able to move forward without its oversight. This shift became evident after Pakistan raised the power tariff twice since September 15.”

Tarin is scheduled to visit Washington next week to attend annual meetings of the World Bank Group and interact with IMF and World Bank officials, according to the finance ministry.

The annual meetings of the boards of governors of the World Bank Group (WBG) and the International Monetary Fund (IMF) will take place from October 11-17, 2021.

The events will bring together from across the world central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.