ISLAMABAD – The five-day negotiations between Pakistan and the IMF review mission have concluded, with Pakistan committing to strict implementation of the program and introducing provincial income tax starting January 1, 2025.
According to media reports, the government assured the IMF of achieving a provincial budget surplus and securing external financing. Consultants will be hired to ensure the execution of the provincial financial agreement.
IMF representatives, led by the mission chief, engaged with Pakistani officials over five days, concluding with a detailed meeting with Finance Minister Muhammad Aurangzeb. The minister reaffirmed Pakistan’s commitment to the program, emphasizing adherence to tax targets and fiscal agreements.
The IMF mission plans to return in February or March for an economic review, linked to the release of a $1.1 billion tranche. During the final meeting, discussions also focused on climate financing and measures to stimulate economic growth within the loan program’s framework.
Pakistan assured the IMF of implementing agricultural income tax and GST on petroleum products. Proposals to increase the petroleum levy from Rs. 60 to Rs. 70 per liter were discussed, with potential price hikes for petrol and diesel by November 16.
The talks also addressed tax shortfalls, energy sector reforms, and the FBR’s tax target of Rs. 12.97 trillion. The IMF emphasized limiting solarization and revising solar net metering systems. The IMF team will compile a report on Pakistan’s economic situation following the discussions.
IMF satisfied with Pakistan’s tax reforms; no mini-budget or GST on petroleum
