Govt to Delay Upcoming Budget Due to IMF Talks

The government has decided to delay the budget session of the National Assembly due to the forthcoming negotiations with the International Monetary Fund (IMF). The government is considering calling the budget session on June 6 while the date of June 10 is being considered for the presentation of the budget for fiscal year 2022-23.

Talks between Pakistan and the International Monetary Fund (IMF) are set to begin on May 18 in Doha. The government will have to reduce the subsidies on petroleum products and electricity as IMF wants to see a reversal of the said subsidies. If talks are successful Pakistan will receive a tranche of $0.96 billion.

The IMF’s mission chief for Pakistan, Nathan Porter, will hold talks with Pakistani officials. Pakistan has already promised to end unfunded subsidies with the IMF. Pakistan had requested the global lender to increase the size of the stalled bailout programme to $8 billion. However, the IMF is yet to announce a decision in this regard.

The government will have to make difficult decisions, including a reduction in expenditure and an increase in revenue. The Chairman of the Federal Board of Revenue (FBR) has already hinted that tax exemptions for wealthy classes and industries will be cut further. Personal income tax rates are also likely to go up in the budget for 2022-23.

According to government sources, the budget will be passed easily as there is no opposition in the National Assembly. Therefore, there is no rush to present the budget, and it will be prepared in consultation with the IMF.