IMF talks: Govt considers Rs. 2.8 per unit surcharge to repay bank loans

Policy negotiations between Pakistan and the IMF for a $1 billion tranche are set to begin today, as reported by national media. 

According to a report citing sources, discussions today will focus on NFC (National Finance Commission) and agricultural income tax matters. The IMF has been briefed that there is a potential to collect Rs. 300 billion under agricultural income tax.

A special session on the Circular Debt Management Plan will also be held today. Pakistan has prepared a plan to reduce circular debt by Rs. 1,250 billion. An initial plan has been formulated to take a Rs. 1,250 billion loan from banks to eliminate circular debt, which will be borrowed at an interest rate of 10.8%.

According to sources, a proposal has been put forward to impose a surcharge of Rs. 2.8 per unit on consumers to repay the bank loan. During the policy negotiations, a special session will also be held with NEPRA.

A briefing will be given on the implementation of NEPRA’s decisions regarding power tariffs. Discussions will also take place on revenue distribution between the federal government and provinces within the National Finance Commission.