IMF and Pakistan Meet for 7th Review 

The Seventh Review meeting between Pakistan and the International Monetary Fund (IMF) has commenced under the Extended Fund Facility (EFF).

The Pakistani officials will brief the IMF officials about the performance of the second quarter (October-December 2021) of the current fiscal year and will set macro targets for the third quarter (January-March 2022) of the current fiscal year.

The Federal Minister for Finance, Shaukat Tarin, and the Country Director of the IMF will lead their delegations in the meeting that will be held virtually in two phases. The first part will be on a technical level for almost one week and will involve the sharing of data, and the second phase will have a policy dialogue held over three or four days.

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Macroeconomic indicators will also be set and discussed by the delegations, and Pakistan will get 687 million Special Drawing Rights (SDR) or $975 million after the successful conclusion of the seventh review.

Sources say that the tax amnesty scheme for the industry and the Prime Minister’s (PM) oil relief package will be discussed as the IMF has reservations about the tax amnesty scheme. Officials stated that Pakistan had told the IMF that it will not grant further tax amnesty and will no longer issue new preferential tax treatment exemptions.

The Government of Pakistan is optimistic about convincing the IMF about the PM’s relief package as all governments provide relief to the general public, especially against the backdrop of the recent oil and commodities price hikes in the international market.

Sources also said that the issue of the preparation of a draft personal income tax legislation is on the agenda of the meeting, and Pakistani officials have to inform the IMF about the process in this regard. They will also present the performance report about the fiscal deficit and current account deficit for the second quarter of the fiscal year to the IMF.

The government will present data on the rebased economy as well. According to the rebased data, the size of the economy has swollen to $346 billion and the budget deficit remains narrowed to 2.1 percent of the DGP due to the rebasing of the National Account.

However, experts believe that considering the reduced electricity prices through the PM’s relief package, it is going to be difficult for Pakistani officials to convince the IMF that they cannot increase the power tariff up to July 2022.



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