ISLAMABAD – The International Monetary Fund (IMF) has raised objections over the tax amnesty scheme and relief package announced by Prime Minister Imran Khan, calling the moves ‘deviations’ from what was committed with the global lender, it emerged on Thursday.
The IMF officials, according to reports, took up the matter during virtual talks on seventh review of a $6bn Extended Fund Facility (EFF) with Pakistani authorities. The negotiations, which started on March 4, has been extended till Monday instead of scheduled conclusion on Friday as talks held so far remained inconclusive.
On Feb 28, PM Khan slashed petroleum prices by Rs10 per liter and the power tariff by Rs5 per unit, adding that the electricity and petrol prices would not be increased till next budget.
“This is a Rs250-Rs300 billion relief package and will be met through cutting different expenditures,” Muzzamil Aslam, a spokesman for Pakistan’s finance and energy ministries, had said following the announcement.
“The package requirement will be met through adjustments, including in the [public sector] companies’ dividends and the amount the country has received for COVID-19 from the IMF. The funds are still lying with us and we will use that amount,” he said.
The announcement of third tax amnesty under PTI rule was made despite a condition placed by the IMF that Pakistan will not grant any such scheme.
Defending the amnesty scheme, Pakistani officials told IMF that it is “targeted” and “ring-fenced” as the government wanted to boost investment in the country.
The Fund also raised questions over general subsidy in shape of Rs10/litre cut in petrol price and Rs5 per unit decrease in electricity price. It said that it could have justified the subsidy if it is provided to targeted groups but it has been announced for all, reports said.
IMF and Pakistani officials have not made any official comments in this regard.
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