ISLAMABAD – The government of Pakistan is set to start negotiations with International Monetary Fund (IMF) to secure the next $1 billion installment of its $7 billion loan package.
Sharif led government already fulfilled several stringent conditions, with assurances made regarding meeting the tax collection target for the current fiscal half-year. The government however moved to find some flexibility from global lender on two critical issues including unmet tax target for the trader-friendly scheme and delays in provincial legislation on agricultural taxes.
IMF mission chief Nathan Porter has reached Islamabad to hold talks with initial technical-level talks expected to progress into policy-level negotiations. The review will focus on Pakistan’s economic performance from July to December 2024, and a successful evaluation could pave the way for the release of the next $1 billion tranche.
Ministry of Finance highlighted that Pakistan had met significant IMF conditions, including provincial budgets. The provinces delivered a surplus budget of Rs776 billion, surpassing the target of Rs750 billion, while provincial revenue exceeded expectations, reaching Rs442.4 billion, against a target of Rs376 billion.
Pakistan tax authorities did not meet its tax collection target for the first half of the fiscal year, recording Rs5.624 trillion instead of the projected Rs6.008 trillion, creating a shortfall of Rs384 billion. The government plans to assure the IMF that this target will be met during the second half of the year.
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