Pakistan and International Monetary Fund (IMF) have initiated policy level discussions for the next tranche of the $ 7 billion loan program. The review process is scheduled to continue until March 14.
According to the Ministry of Finance, the IMF delegation will evaluate Pakistan’s progress in implementing financial reforms described in accordance with the program’s conditions.
The ongoing policy levels between the two sides are focused on new revenue measures, reforms of the energy sector and debt reduction strategies, sources say.
According to officials, discussions include the introduction of a supplement of RS2.80 per year. Unit on electricity bills and the introduction of a carbon tax on petrol and diesel vehicles.
There is also consideration for charges on coaled plants as part of Pakistan’s broader efforts to meet climate and tax obligations.
Tax reforms in the electric vehicle policy are discussed where the IMF is expected to push Pakistan to expand its revenue base.
The privatization of state -owned companies is also part of the agenda where the IMF is looking for specific short -term plans.
Technical negotiations are expected to lead to a formal statement from the IMF that outlines key policy expectations.
Sources show that Pakistan may be obliged to take additional tax measures to meet the lender’s circumstances.
The latest conversations come as Pakistan prepares for the next financial year’s budget and seeks to reduce its circular debt in the electricity sector. The IMF has allegedly called on authorities to demonstrate stronger obligations before releasing the next tranche.
Last week, the IMF mission arrived in Pakistan to officially initiate discussions for the first review of the extended fund facility (EFF) that was secured last year.
According to the Ministry of Finance, the IMF delegation, led by Nathan Porter, met with Finance Minister Muhammad Aurangzeb in Islamabad. The meeting focused on the overall financial situation in the country.
In addition, the federal government also presented a proposal for the IMF to revise electricity stars for solar paneleers using net meter.
The plan includes the purchase of excess electricity generated by solar cell users at a significantly lower rate, reducing it from the current RS27 per year. Unit for approx. RS10 per Unit.
