Tag: IMF

  • PPP did not join federal cabinet as government will not last long, says Imran Khan

    PPP did not join federal cabinet as government will not last long, says Imran Khan

    Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan has said that the Pakistan Peoples Party (PPP) did not join the federal government because it will not last long.

    The former prime minister spoke to journalists in Adiala jail on Wednesday, stating that the “establishment, caretaker government, and the Election Commission are all one, and everything is based on lies.”

    Terming Chief Election Commissioner (CEC) Sikander Sultan Raja a “liar,” Khan said the CEC is still occupying the office despite five reports issued by election watchdogs on election irregularities.

    The founder of PTI also claimed that the new government will not last more than five to six months. However, inflation will increase in the country after signing a new deal with the International Monetary Fund (IMF).

    Imran Khan, who is currently in Adiala jail, stated that he is mentally ready to stay incarcerated.

    Regarding strain ties with the establishment, he responded to a question, saying: “Attempts are under way to create differences between us and the army.”

  • Final hurdle cleared: Pakistan on verge of securing IMF tranche

    Final hurdle cleared: Pakistan on verge of securing IMF tranche

    Pakistan is on track to receive the final installment of the $3 billion standby arrangement following the country’s officials meeting the economic performance criteria outlined by the International Monetary Fund (IMF), as per reports.

    Reports indicate that the IMF mission in Pakistan has concluded its review and is preparing to announce an agreement with the government for the disbursement of the last installment, totaling $1.1 billion.

    If successful, the agreement will be presented to the IMF executive board in April for their ultimate approval.

    This development follows recent discussions suggesting that negotiations with the global lending institution may be prolonged due to the parties failing to reach a consensus.

    It’s noted that the IMF has urged the government to regulate and tax cryptocurrency and other online trading platforms.

    Additionally, discussions between Pakistan and the IMF have included talks on privatising financially struggling state-owned enterprises, with Pakistan International Airlines being a priority for privatisation.

    Earlier, the government declined the IMF’s proposal to revisit the National Finance Commission (NFC) Award, citing constitutional concerns.

    The IMF had suggested reviewing the NFC Award during the second round of talks, citing a shortage of federal funds.

    Government sources said that any recommendation on the NFC Award that contradicts the constitution will not be endorsed.

    Pakistan managed to avoid a potential sovereign default after the previous coalition government, led by Pakistan Muslim League-Nawaz (PML-N), reached a staff-level agreement with the IMF on a $3 billion SBA.

    Finance Minister Muhammad Aurangzeb expressed Pakistan’s intention to secure a larger and more enduring program with the IMF, aiming to align with the country’s quota. He made these remarks while speaking to reporters in Islamabad on March 13.

  • Nawaz Sharif criticises increase in gas, power rates under IMF pressure

    Nawaz Sharif criticises increase in gas, power rates under IMF pressure

    Pakistan Muslim League-Nawaz (PML-N) supremo Nawaz Sharif criticised the increase in rates of electricity and gas prices after directives from the International Monetary Fund (IMF) to do so.

    The former prime minister raised concerns regarding the increase in rates of gas and power during a meeting with the Punjab government. The Chief Minister (CM) of Punjab, Maryam Nawaz, was also present in the meeting.

    The leader of the PML-N commented on high inflation, questioning how much more the nation could endure. He urged authorities to solve the issue of costly electricity for small farmers by giving them solar panels.

    Senior provincial minister Marriyum Aurangzeb, Information Minister Azma Bukhari, Transport Minister Bilal Akbar, MPA Sania Ashiq, provincial chief secretary, Planning and Development Board chairman, Transport secretary, and other officials concerned were also present at the meeting.

    The PML-N supremo also said that small farmers should be rewarded for their hard work and should be saved from the exploitation of big farmers.

  • IMF urges Pakistan to expand capital gains tax scope to include cryptocurrencies

    IMF urges Pakistan to expand capital gains tax scope to include cryptocurrencies

    The International Monetary Fund (IMF) has advised the Federal Board of Revenue (FBR) to broaden the scope of capital gains tax (CGT) by incorporating cryptocurrencies into the tax regime.

    This recommendation arises amidst ongoing discussions between the Fund and Pakistani authorities regarding the $3 billion stand-by arrangement (SBA).

    The four-day review, which commenced on Thursday, aims to unlock the final tranche of approximately $1.1 billion secured by Islamabad under a last-minute rescue package last summer, thus averting a sovereign debt default.

    During these deliberations, the IMF proposed a reassessment of tax slabs for real estate and listed securities to ensure comprehensive taxation of all gains, irrespective of asset holding periods.

    Moreover, the IMF urged the FBR to mandate property developers to monitor and report all pre-completion property transfers, with penalties for non-compliance. This move aims to bring under the tax umbrella the prevalent practice of trading property plot files within housing schemes.

    These recommendations are anticipated to be incorporated into the forthcoming bailout package under the Extended Fund Facility (EFF), potentially becoming integral to the FY2024–25 budget through the finance bill.

    The IMF’s technical assistance report highlights the challenges faced by Pakistani authorities in assessing and collecting taxes on capital gains from real estate transactions, particularly those occurring before formal property registration.

    To address this issue, the IMF suggests obligating property developers to track and report all pre-completion property transfers, with penalties for non-compliance, thereby shifting tax liabilities to developers if they are not recoverable from the initial transferor.

    Furthermore, the IMF advocates for the expansion of assets subject to capital gains tax to include emerging investment avenues such as cryptocurrencies alongside real estate and listed securities. 

    It also proposes revising tax slabs to ensure equitable taxation of capital gains, irrespective of asset holding durations.

    Overall, these IMF recommendations seek to fortify the taxation framework, ensuring a more inclusive and equitable approach to capital gains taxation in Pakistan.

  • Plastic currency coming soon in Pakistan?

    Plastic currency coming soon in Pakistan?

    Negotiations between Pakistan and the IMF mission for the next instalment of a vital loan will continue to proceed today.

    According to sources quoted by Geo news, IMF officials will be briefed on FBR reforms, tax collection and other issues, as well as more immediate measures to increase tax collection in the current financial year.

    Sources say that State Bank officials will brief the IMF delegation on the plan to issue new plastic notes to prevent fake currency.

    Such currency notes are being used in Far Eastern countries and Switzerland.

    The IMF will also be briefed on reports issued under the United Nations Anti-Corruption Convention.

    The IMF had set a condition for Pakistan to prepare a report from experts on the efficiency of anti-corruption institutions.

    This condition has to be implemented by the Ministry of Interior and Ministry of Law.

    The IMF will also be briefed on improving the efficiency of government institutions and privatisation.

  • IMF mission holds crucial talks with FinMin Aurangzeb on $3 billion SBA

    IMF mission holds crucial talks with FinMin Aurangzeb on $3 billion SBA

    In a pivotal meeting held on Thursday, Pakistan’s Finance Minister, Muhammad Aurangzeb, engaged in discussions regarding structural reforms and the viability of the energy sector with the visiting International Monetary Fund (IMF) mission.

    The mission’s visit is part of the second review process of the $3 billion Stand-By Arrangement (SBA) established between Pakistan and the international lender.

    Key points of deliberation encompassed various facets of Pakistan’s macroeconomic landscape, including fiscal consolidation efforts by the government, structural reforms, energy sector sustainability, and governance of state-owned enterprises (SOEs).

    Expressing a warm reception, the finance minister underscored the government’s steadfast commitment to collaborating with the IMF to drive forward the reform agenda, aimed at fostering economic growth and bolstering stability across Pakistan.

    During the meeting, Nathan Porter, head of the IMF mission, extended congratulations to Muhammad Aurangzeb on his appointment as the finance minister.

    Anticipations are high that the IMF mission’s visit could culminate in a staff-level agreement regarding the second review of the SBA.

    Since its inception in July 2023, Pakistan has received $1.9 billion out of the allocated $3 billion under the nine-month programme.

    Aurangzeb, articulating the government’s stance, outlined intentions to explore the possibility of acquiring a more extensive and prolonged Extended Fund Facility (EFF) within the IMF framework, with the overarching objective of attaining macroeconomic stability.

    Officials from Pakistan, including Finance Minister Muhammad Aurangzeb and Energy Minister Musadik Malik, apprised the IMF team of the concerted efforts undertaken to implement the prescribed reforms, including the adjustment of energy tariffs.

    An official from the Finance Division, speaking on anonymity, disclosed the IMF’s acknowledgment of Pakistan’s strides in meeting quarterly programmeme targets under the SBA.

    Simultaneously, discussions are underway to chart the trajectory of the subsequent programmeme, with deliberations leaning towards a more extensive endeavour valued at approximately $8 billion.

    Minister Malik elaborated on the government’s energy reform agenda, highlighting recent adjustments in electricity and gas prices aligned with the stipulated schedule.

    The recent levy hike on petrol and diesel, coupled with the augmentation of gas tariffs for domestic consumers, underscores Pakistan’s commitment to fulfilling key conditions outlined in the IMF’s final review.

    Economic analysts anticipate a seamless final review process, citing Pakistan’s commendable adherence to the IMF’s performance targets as a harbinger of success.

  • SBP sees surge of over $17 million in forex reserves

    SBP sees surge of over $17 million in forex reserves

    The latest data released by the State Bank of Pakistan (SBP) revealed a notable rise in the country’s foreign exchange reserves. During the week ending March 8, 2024, SBP’s reserves increased by $17.2 million, marking a 0.22 per cent growth, reaching a total of $7.91 billion.

    Additionally, Pakistan’s overall reserves experienced a surge, ascending by $131.3 million, or 1.01 per cent, week-on-week (WoW), to a sum of $13.15 billion. This increase was further complemented by a rise in reserves held by commercial banks, which climbed by $114.1 million, or 2.23 per cent, to reach $5.24 billion.

    In a significant development, the second review of the stand-by arrangement (SBA) with the International Monetary Fund (IMF) is slated to take place from March 14 to 18, 2024. This review holds particular importance as it marks the final assessment under the SBA. Upon reaching a staff-level agreement, the final tranche of $1.1 billion will be disbursed, subject to approval by the Executive Board of the IMF.

    It is noteworthy that in the current fiscal year, Pakistan has witnessed a substantial increase in its total liquid foreign reserves, amounting to $3.99 billion, or 43.57 per cent. Similarly, the ongoing calendar year has seen a rise of $0.48 billion, or 3.77 per cent.

  • Pakistan clears hurdles for IMF review, final agreement expected

    Pakistan clears hurdles for IMF review, final agreement expected

    The newly elected government of Pakistan has indicated its intention to secure a new loan from the International Monetary Fund (IMF).

    In line with this, representatives from the IMF are scheduled to visit Pakistan for the second review of the ongoing Stand-By Arrangement (SBA). The review is set to take place from March 14 to 18 in Islamabad.

    According to a statement released by the finance ministry, Pakistan has successfully met all structural benchmarks, qualitative performance criteria, and indicative targets required for the IMF review.

    This upcoming review marks the final evaluation of the SBA, with a staff-level agreement anticipated upon its completion.

    Once this agreement is reached, the final tranche of $1.1 billion under the SBA will be disbursed, subject to approval from the IMF’s Executive Board.

    Last summer, Islamabad secured a vital rescue package from the IMF, preventing a potential sovereign debt default.

    The successful completion of the final review is expected to unlock approximately $1.1 billion.

    Prime Minister Shehbaz Sharif has instructed his finance team, led by newly appointed Finance Minister Muhammad Aurangzeb, to begin preparations for seeking an Extended Fund Facility (EFF) once the standby arrangement concludes on April 11.

    The IMF has expressed readiness to develop a medium-term programme if Pakistan submits an application for one.

    Notably, the government has not officially disclosed the amount of additional funding it intends to seek through a successor programme from the IMF.

  • IMF mission to arrive tomorrow for final review discussions on Pakistan’s SBA

    IMF mission to arrive tomorrow for final review discussions on Pakistan’s SBA

    The International Monetary Fund (IMF) mission is poised to commence vital economic review discussions from March 14 to 18, 2024, marking the conclusive evaluation of Pakistan’s Standby Arrangement (SBA).

    Sources within the Finance Ministry have confirmed that the IMF mission is scheduled to touch down in Pakistan tomorrow night, kickstarting a series of pivotal discussions set to unfold over the next four days.

    During this intensive period, the IMF mission is slated to engage in comprehensive dialogue with Pakistan’s economic team. Key participants include representatives from the Finance Ministry, Energy Ministry, Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Planning Commission, and the Petroleum Division.

    Insiders suggest that the IMF mission will delve into discussions covering a spectrum of economic facets. Talks are expected to encompass various critical sectors, including finance, energy, taxation, and central banking.

    Furthermore, in parallel with these discussions, preliminary conversations are anticipated to unfold regarding the potential initiation of a new loan programme with the IMF mission. This prospect adds an extra layer of significance to the ongoing economic deliberations as Pakistan navigates its financial landscape in the pursuit of sustainable economic growth.

    Stay tuned for comprehensive coverage as the IMF mission engages in the final review of Pakistan’s Standby Arrangement, paving the way for crucial decisions that could shape the nation’s economic trajectory in the coming months.

  • Imran Khan confirms writing letter to IMF

    Imran Khan confirms writing letter to IMF

    Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan has said on Friday that he has written a letter to International Monetary Fund (IMF), asking to look at the matter of poll rigging in Pakistan.

    “The letter to the IMF has been written and will be dispatched today. If the country gets a loan in such a situation, then who will return it,” Khan asked the media during a hearing of the £190 million reference at Adiala Jail.

    The former prime minister warned that taking the loan would cause more poverty, adding that unless the country invests in itself, its loans will continue to rise. 

    Khan’s update about the letter comes a day after PTI senator Ali Zafar announced that the party founder had decided to write a letter to the global lender, urging it to call for an audit of the February 8 election before it continues talks with Islamabad for a new loan programme.

    IMF has previously never commented on rigging allegations, nor is probing rigging part of its mandate. The Fund has reportedly said on Friday that it looks forward to working with the new government.