The government is planning to table the mini-budget in the last week of December to pave the way for the next International Monetary Fund (IMF) tranche of $1 billion and other linked flows of around $2.5 billion.
Until then, Shaukat Tarin may be elected as a senator, and the IMF has set 12 January as the deadline for it.
The Minister for Information, Fawad Chaudhry, told ProPakistani, “We have ample time and no worries to get through this deadline as the basic decisions are taken and we might easily get it done in due time”.
Another senior minister told ProPakistani, “We have met most of the IMF conditions and we are comfortable in meeting the remaining ones”. He added, “In the given timeline, we have ample time to meet all the conditions as set in staff agreement of the IMF”.
The Minister for Energy, Hammad Azhar, told this publication, “We will bring the bill in Parliament in a week or so”.
Another senior cabinet member informed ProPakistani, “In the due course of time, the Advisor would also, most probably, be elected as senator and will take oath as minister. Then he would table it in the parliament”.
The revenue measure of Rs. 350 billion will entail the removing of large scale exemptions of sales tax, and enforce income tax on certain sectors, which can only be amended in the parliament.
The cut down on the Public Sector Development Program ( PSDP) to match the Rs. 550 billion gap between the resources and the expenditures will finally be adjusted as agreed with the IMF. The global lender has already denied the request of taking loans from the State Bank of Pakistan (SBP). Meanwhile, the rate of commercial bank loans for the government is around 10 percent now, while SBP credit in net worth remains at zero percent.
Laptops, computers, mobile phones, and imported cars, and luxury items are expected to get a hike in taxes and duties.
After meeting the targets, a Letter of Intent will be signed by the Ministry of Finance and the SBP, and will be sent to the IMF for the approval of its board for the tranche. After the board clears it, the Eurobonds/Sukook launch will also be cleared and the funding from the IDB, the World Bank, and the ADB will also get approved.
Although the program seems to be back on track, the final approval of the IMF board would give broad-based confidence to investors and lenders.
