Pakistan and IMF are still facing disagreement over finalizing the correct taxation measures, increasing basic tariffs for electricity, and achieving overall external financing.
Earlier, IMF shared its list of Memorandum of Economic and Financial Policies (MEFP) with Pakistani authorities for discussion.
The list proposed in the MEFP had been under discussion among policymakers in Islamabad for the past two days.
IMF had been insisting on sustained tax measures. The Pakistani side will hold talks with the IMF through virtual talks today to finalize specific tax measures.
It is not yet known how long it will take for the two sides to resolve long-standing issues over power base tariffs and incorporate the overall external financial needs and net international reserve (NIR) target for the end of June 2023.
Talking to the media, top government sources confirmed that the IMF shared its list and virtual talks to finalize details on important issues related will begin on Monday evening.
“Once the issues regarding the implementation of taxes are settled, an agreement will be reached at the staff level,” the official said.
The IMF had been pushing for sustained tax measures as well as rising GST from 17 to 18 percent, levying GST on POL products, and raising petroleum levies on energy.
Moreover, the Tax Laws Amendment Ordinance 2023 is expected to be promulgated within this week from February 15, 2023, to collect an additional tax of Rs170 billion in the remaining four-and-a-half months of the current financial year.
In the power sector, the IMF called for an increase in basic tariffs as the government approved a revised Circular Debt Management Plan (CDMP) to bring down the baseline scenario to reduce debt pile-up.