Rs200 billion ‘mini budget’ on the cards to woo IMF

ISLAMABAD – The Pakistani government is reportedly considering a Rs200 billion ‘mini budget’ to woo the International Monetary Fund, which is reluctant to visit a cash-strapped country to hold the 9th review of the ongoing Extended Fund Facility (EFF) Programme.

An Express Tribune report quoting sources suggests that the Sharif-led government may impose new taxes of around Rs200 billion with a ‘mini-budget’ likely to come in effect in February.

The government is considering ending tax exemptions, and imposing hefty taxes, to ensure meeting the tax collection target and fulfilling the stern conditions set by Washington-based lender for the release of the next tranche of loan.

Despite skyrocketing inflation, Sharif-led government is looking to impose new taxes to thaw the stalled talks with IMF as the country’s economic crisis worsened over the last couple of months with forex reserves held by the country’s central bank now standing below $5 billion for the first time in nearly a decade.

The mini-budget is on the cards as IMF called on Islamabad to honour its pledges and take stern measures to bridge the revenue shortfall.

The report further added that finance chief Ishaq Dar has started discussing power tariff increases and other measures with officials to save the country from going into debt default.

It added that Sharif-led government earlier mulled tapping only the imports sector for taxes however officials claimed that vehicles, sugary drinks and petroleum products will witness a price hike after new proposals.

IMF links revival of Pakistan’s stalled loan programme with completion of all conditions in three weeks