Islamabad: In what could be called a breakthrough in the Pak-IMF talks, Pakistan on Tuesday received a draft from the IMF that outlines targets to be achieved for the 7th and 8th reviews of its International Monetary Fund bailout programme.
The news was confirmed by Finance Minister Miftah Ismail, who tweeted, “the Government of Pakistan has received [a] MEFP from the IMF for combined 7th and 8th reviews.”
Early this morning, the Government of Pakistan has received an MEFP from the IMF for combined 7th and 8th reviews.
— Miftah Ismail (@MiftahIsmail) June 28, 2022
Earlier it was reported that the IMP would hand over the Memorandum of Economic and Financial Policies (MEFP) to Pakistan on Monday.
This step indicates that the two sides have reached an agreement on key monetary and fiscal policies.
On May 21, Pakistan and the Fund had agreed to increase the FBR target of tax collection by Rs438 billion and cut down on proposed expenditures in the budget 2022-2023 “to achieve revenue surplus in the next fiscal year”.
The government complied with the IMF’s demands and agreed to impose a tax of Rs 1,200 on individuals earning between Rs 50,000 and Rs 100,000 in annual income.
In addition to increasing the FBR target and cutting down on expenditures to achieve a surplus, the two sides also reached an agreement on the major bone of contention; the petroleum levy.
After these developments, the government also announced the imposition of a 10 per cent super tax on big industries to generate more revenue.