Dar says country will cut Rs85 billion in spending, as well as a number of other measures to shrink fiscal deficit
\nIslamabad
\nMinister for Finance and Revenue Senator Mohammad Ishaq Dar on Saturday informed the National Assembly that Pakistan had agreed to raise a further Rs215 billion in new taxes after three-day parleys with the officials of the International Monetary Fund (IMF) to complete the 9th review under the Extended Fund Facility (EFF), pending due to the country\u2019s external financing gap.
\n\u201cPakistan and IMF had detailed negotiations for the last three days as a last effort to complete the pending review,\u201d he told parliament.
\nFor the fiscal year starting next month, Pakistan will raise a further 215 billion rupees ($752 million) in new tax and cut 85 billion rupees in spending, as well as a number of other measures to shrink the fiscal deficit, he said.
\nThat will revise Pakistan\u2019s revenue collection target to 9.415 trillion rupees ($33 billion) and put total spending at 14.480 trillion rupees ($51 billion), Dar said. \u201cThese changes will make our fiscal deficit much better,\u201d he said.
\nHe made it clear that this reduction will not affect the annual development plan as well as salaries and pensions of government employees, claiming that IMF has agreed to our stand.
\n\u201cWe have ensured that the new tax will not affect the poor,\u201d he claimed, and said the petrol levy will be raised from 50 rupees to 60 rupees, and will be capped at the new ceiling for any future changes. He also announced lifting of restriction of all imports enforced in December in a bid to cut the current account deficit, which has been one of the major concerns by the IMF to release the funds.
\nMoney allocated for cash handouts to the poor was also revised from 450 billion rupees to 466 billion rupees for fiscal 2024, Dar said.
\nThe review came a day after Prime Minister Shehbaz Sharif met with IMF Managing Director Kristalina Georgieva on the sidelines of the Global Financing Summit in Paris.
\nThere is less than a week to go before the IMF\u2019s Extended Fund Facility agreed in 2019 expires on June 30.
\nUnder the $6.5 billion facility\u2019s ninth review, negotiated earlier this year, Pakistan has been trying to secure $1.1 billion of funding stalled since November. With central bank foreign exchange reserves barely enough to cover one month of controlled imports, Pakistan is facing an acute balance of payment crisis, which analysts say could spiral into a debt default if the IMF money doesn\u2019t come through.
\nThe IMF funding is critical to unlock other bilateral and multilateral financing for the debt-ridden South Asian economy.
\nDar said that Pakistan held talks with the IMF with complete sincerity and assured the house that once the things with the international lender were settled, all details would be made public by placing the agreement on the official website of the Ministry of Finance.
\n\u201cI hope, God willing, that we will have an agreement with the IMF,\u201d he concluded.<\/p>\n","protected":false},"excerpt":{"rendered":"
Dar says country will cut Rs85 billion in spending, as well as a number of other measures to shrink fiscal deficit Islamabad Minister for Finance and Revenue Senator Mohammad Ishaq Dar on Saturday informed the National Assembly that Pakistan had agreed to raise a further Rs215 billion in new taxes after three-day parleys with the […]<\/p>\n","protected":false},"author":2,"featured_media":339838,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":{"0":"post-339799","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-news"},"yoast_head":"\n