Pakistan and the International Monetary Fund (IMF) will sign the agreement for the revival of the extended fund facility (EFF) in the coming days.
According to sources, the IMF will share the draft of a Memorandum of Economic and Financial Policy (MEFP) with the Pakistani Authorities on Monday (tomorrow). The provision of MEFP is a key step which that indicates that the two parties have reached an agreement.
The talks between the two sides are expected to resume on June 28. Finance Minister Miftah Ismail and the State Bank of Pakistan Governor will sign the contract with IMF on Pakistan’s behalf.
According to sources, Pakistan has requested IMF to enhance the loan programme by $2 billion to $8 billion instead of $6 billion. It has also asked for a one-year extension in the programme that will take it to 2024.
Pakistan has agreed to a number of stern conditions including the gradual increase in petroleum levy up to Rs. 50 per liter to seal the deal. An 11 percent sales tax will also be levied on petroleum products with effect from July 1, 2022. In the last month, the government has considerably increased the prices of petroleum products and has completely abolished the subsidy that was being provided earlier.
The Federal Board of Revenue (FBR)’s tax target has also been increased from Rs. 7.004 trillion to Rs. 7.47 trillion. The government has also reversed the purposed of relief for the salaried class and imposed a super tax on 13 industries.