ISLAMABAD ; Feb 10,2023 : Finance minister , Ishaq Dar , on Friday confirmed at an early morning presser that the government has agreed to all doable conditionalities like imposing the new taxes of Rs 170 billion to make- up the gap in revenue and expenditure for the current fiscal, implementations of much- needed reforms to deal with the menace of circular debt , increase in Benazir Income Support Programme (BISP) and honouring payments against loans to foreign donors and financial institutions .
The International Monetary Fund (IMF) delegation had 10 -day visit to Islamanad to hold talks with the economic managers of Shahbaz Sharif government.
After concluding talks with Pakistan’s side IMF delegation shared Memorandum of Economic and Financial Policies (MEFP) .
The MEFP is a key document that describes all the conditions, steps and policy measures on the basis of which the two sides declare the staff-level agreement.
Once the draft MEFP has been shared, the two sides discuss the policy measures outlined in the document. Once these are finalised, a staff-level agreement is signed, which is then forwarded to the Fund’s Executive Board for approval.
Ishaq Dar told the media person that IMf team has shared MEFP with Pakistan government and
both sides will hold virtual meeting to discuss MEFP and once it is done the fund ‘s executive board will approve a $ 1.2 billion tranche .
What Pakistan has agreed to with the IMF.
Imposing taxes amounting to Rs170 billion
Minimising untargeted subsidies in the gas and energy sectors
Ensuring that there is zero addition to gas sector’s circular debt
Raising the petroleum development levy on diesel to Rs50 through two Rs5 hikes on March 1 and April 1
Increasing allocation of BISP to Rs400bn.
Mr Dar said there are some difficult steps to be taken to fix up things like blocking inflow of more circular debt in gas sector and withdrawal of untargeted studies from power sector but added these steps were urgent and necessary to fix up things that put financial burden on Pakistan .
He said Pakistan was short of Rs 1200 billion in cost and Revenue in the power sector every year and this huge burden has to park somewhere.
The Fiance minister said the government team did good job for negotiations with the fund and it will conclude at the signing of a formal agreement for resumption of enhanced Fund Facility (EFF) facility for Pakistan.
Mr Dar told a questionnaire that Pakistan has done much of its work to do away with irritants like imposing Petroleum Development Levy (PDL) on gasoline . He said ” Target of imposing PDL Upton Rs 50 per litre on petrol has already been done and Rs 40 per litre out of Rs 50 has already been added to diesel price and the rest PDL of Rs 10 per litre on diesel will be imposed in two installments on March 1 and April 1″.
Mr Dar said the government has also agreed with IMf to increase allocation for BISP from Rs 360 billion to Rs 400 billion in the current fiscal year.
To a question Mr Dar said those consumers who use up to 300 watts power will remain out of any tariff increase.
