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ISLAMABAD: The sixth review of $6 billion Extended Fund Facility (EFF) for Pakistan will be presented to the International Monetary Fund’s (IMF) executive board on January 12, the finance ministry confirmed, paving the way for disbursement of about $1bn tranche.
Muzammil Aslam, a spokesperson for the Ministry of Finance, said in a tweet: “I am pleased to confirm 6th review will be presented to IMF Board on 12th January, 2022”.
I am pleased to confirm 6th review will be presented to IMF Board on 12th January, 2022.
— Muzzammil Aslam (@MuzzammilAslam3) December 23, 2021
Another official said the government was ready to get the Finance (Supplementary) Bill 2021 passed by the National Assembly to ensure reasonable time before the IMF board meeting.
The IMF directors traditionally require two weeks to review the memorandum of economic and fiscal policy measures. Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin had committed to the IMF that Pakistan would complete all five “prior actions” before requesting a meeting of the board of directors.
Under those prior actions, the government, through the supplementary finance bill, will effect a net fiscal adjustment of almost Rs550bn during the remaining part of the current fiscal through a 22 percent cut in development funds, about Rs360bn worth of withdrawal of tax exemptions with a revised tax target of Rs6.1 trillion and increase in petroleum levy on major petroleum products by Rs4 per litre per month.
Making an upfront announcement about “five prior actions” to secure approval of the IMF board, Tarin had said the government would also ensure “approval” by parliament to grant autonomy on matters of monetary policy, exchange rate and recruitments to the State Bank of Pakistan (SBP).
These prior actions include SBP (Amendment) Bill, withdrawal of tax exemptions and increase in energy tariff. The action pertaining to tariff adjustment has already been taken while bills to end tax exemptions and give autonomy to the SBP have been finalised.
Under the supplementary finance bill, the Federal Board of Revenue (FBR) is seeking amendments to three key tax laws relating to customs, sales tax and income tax, besides the services tax law for the federal capital.
