Islamabad, 15 June, 2023 (GNP): The International Monetary Fund (IMF) is unsatisfied with Pakistan’s budget 2023-24 and pointed many faults out in it on Wednesday.
According to the IMF in FY24 budget Pakistan has wasted a chance to widen the tax net and curtail tax spending. The condition of tax amnesty is also unfavorable for the Fund’s program.
The IMF is ready to make big changes in the fiscal budget 2023-24 and turn things in favor of its program ahead of the budget’s passage from the parliament.
Read also: Pakistan government set to share budget details with IMF
The IMF’s resident representative for Pakistan Esther Ruiz passed a statement in which she said that Pakistan required to content the IMF on three grounds as well as the forthcoming fiscal year budget prior to the board will review whether to pass at least a certain amount of the $2.5 billion pending payment under the 2019 Extended Fund Facility (EFF) that will become invalid at the end of June 2023.
Ruiz added a new scheme of tax amnesty offered by the government of Pakistan in its upcoming year budget lays a “damaging precedent” and hits upon the programme’s categorically.
Although there was no clarity in a statement about the scheme on which the Fund has reservations.
She continued regarding the draft of budget 2023-24, “misses an opportunity to broaden the tax base in a more progressive way, and the long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable BISP recipients and development spending”.
Ruiz also stated that it would be better if the FY24 budget could cover measures which satisfy liquidity pressures of the energy sector.
IMF comment on Pakistan FY24 Budget: pic.twitter.com/IPs0ikfnKg
— Javed Hassan (@javedhassan) June 14, 2023
Pakistan has a time for only one board meeting before the end of the ongoing programme as the officials of IMF informed it earlier.
The country was looking forward to receiving almost $1.2 billion in October 2022 from the IMF just as part of the EFF’s ninth assessment because Pakistan left behind the least number of reserves for the past few months.
The share has not transpired even after the passing of 8 months as according to the IMF Pakistan has been incapable of fulfilling major requirements of the programme.
Pakistan is very close to the expiry of EFF, the ninth review of the programme remains ambiguous and the tenth review which was ideally a part of the programme seems impractical.
