Pakistan, IMF agree on top budgetary priority

Islamabad, June 15 Officials from the International Monetary Fund (IMF) have been reviewing Pakistan’s budget for 2022-2023 which contains points for further negotiations before resuming the IMF package for Islamabad, Dawn reported on Wednesday.
Pakistan had unveiled a $47 billion budget for 2022-23, which includes several measures aimed at fiscal consolidation which the Pakistan authorities expect will convince the IMF to resume the much-needed bailout payments to the country.
At the talks, held in Doha last month, the IMF and Pakistan had reached an understanding on several key issues, such as withdrawing subsidies and increasing the tax collection.
The two sides also agreed on one of the key points which was social protection, i.e. reducing the impact of austerity measures on the poor, after the IMF officials agreed that some of the measures will hit the poor very hard
Similar arrangements could also be made for the power sector to protect low-end consumers, one of the sources said, pointing out that the IMF views such measures as “social protection” and would be ready to help the government in doing so.
The measures announced in the budget include two percent additional tax on individuals with annual income of 30 million rupees, a 20 percent increase in tax collection by preventing evasion, and reducing fuel consumption to curb the ever-widening oil bill.
Pakistan had signed a 39-month, $6bn Extended Fund Facility with the IMF in July 2019, but the Fund stopped the disbursement of about $3bn when the previous government reneged on its commitments.