Islamabad (Pakistan): The Pakistan ministry of Finance is expected to hold crucial talks with the International Monetary Fund (IMF) review mission of the USD 3 billion Standby Arrangement (SBA) programme, from next week, as reported by The News International.
A formal invitation will be sent to the Washington-based lender soon after the formation and oath-taking of the federal cabinet. Reportedly, soon after the cabinet formation, the IMF team would arrive in Islamabad to kick-start talks for the completion of the second review under the USD 3 billion SBA programme.
Moreover, Pakistan would also request a fresh deal under 36-month Extended Fund Facility (EFF), according to The News International. "The size of the next EFF programme has not yet been discussed and finalised but Islamabad will look into the possibility of augmenting EFF with climate finance to maximise the size of the programme from $6 billion to $8 billion," official sources said.
Meanwhile, the first and foremost challenge for the upcoming finance minister would be making out all the efforts to achieve the FBR's tax collection target of Rs 890 billion for March 2024 by materialising the agreed quarterly (Jan-March) target with the IMF. "If there is any shortfall in March 2024, then the IMF may come up with additional taxation measures for the remaining period of current fiscal year," the official said.
Newly elected Prime Minister Shehbaz Sharif chaired a high-level meeting at the PM office on Tuesday to get an extensive briefing from the FBR team on the future roadmap for overhauling the taxation system, The News International reported. The FBR has so far collected Rs 5.82 trillion in the first eight months of the current fiscal year but it has witnessed a revenue shortfall of Rs 33 billion in achieving the monthly target of February 2024.
The FBR requires revenue collection of Rs 3.58 trillion in the remaining four months (March-June) period to show the desired target of Rs 9.415 trillion on June 30, 2024. Moreover, in March 2024, the monthly target of Rs 890 billion will have to be materialized to achieve the third quarter (Jan-March) period agreed with the IMF.
The IMF has already listed eight contingent measures to be undertaken by the FBR to fill the revenue gap if the shortfall occurs in achieving the monthly target, according to The News International. Earlier, while chairing the meeting, Prime Minister Shehbaz Sharif directed to immediately start the automation and digitisation of the FBR, adding that he would personally monitor the whole process.
He further asked to follow the best models for automation and digitisation to bring transparency in FBR working to increase tax collection and receipts and to eliminate tax theft, corruption and smuggling.
The meeting was also attended by FBR Chairman Malik Amjad Tiwana who briefed the prime minister on the measures taken towards automation, widening of tax net, payment of refunds to exporters and stopping smuggling and tax theft.
Shehbaz, however, was not satisfied with the briefing and maintained that the automation and digitisation process should begin immediately as per the world's best models. "You should acquire the services of international firms," he said.
Shehbaz said there was a need to move forward while learning lessons from the past. "We will have to accept the challenge of stopping loans and this can be achieved with the participation of competent people," he said.
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