While acknowledging that the tax revenue target for the current fiscal is “unattainable”, the government has committed to targeting Rs 5,963 trillion for the next budget, compared to the revised target of Rs 4,691 trillion for the current fiscal.
Documents published by the IMF on Thursday at its second, third, fourth and fifth review of the EFF which ended last month reveal that the government has set ambitious targets for revenue increases. The document also suggests raising levies on petroleum products to a maximum level (Rs 30 per liter) this year and next year to raise around Rs 510 billion this year rather than the budgeted target of Rs 450 billion.
In the agreement, Pakisatan will also reduce this year’s development program to Rp1.169 trillion from the budgeted target of Rp1.324 trillion.
The government has also given the ability to make gas tariff adjustments and does not consider future tax exemptions or tax amnesty.
In addition, the government has committed to ensuring transparency of its Covid-related spending. It said information about the contracts awarded and beneficial ownership would be uploaded on a publicly accessible website at the end of April, adding that the procurement of Covid-related supplies and payments would be audited by the Auditor General of Pakistan and published in the finance ministry. website also at the end of April.
Pakistan will meet various conditions within six months to stay within the $ 6 billion IMF program, but its economic resilience still hinges on the survival of $ 11 billion in China.
This condition is one of 11 actions that the government will take in September this year. They are in addition to five previous actions taken to convince the IMF board to approve the case. They include the introduction of a mini budget of Rs140 billion, an increase in electricity prices of Rs 4.97 per unit from December 2020 to January 2021 due to quarterly and annual rates, introduction of amendments to State Bank of Pakistan (SBP) Act, and approval of a circular debt management plan by the cabinet.
According to the IMF, Pakistan’s gross foreign financing needs – the funds needed to pay off foreign loans and finance its imports – amount to $ 27 billion over the next 12 months. These financing needs, said the IMF, will be met with support from China $ 10.8 billion, UAE $ 2 billion, World Bank$ 2.8 billion, that is G20$ 1.8 billion worth of initiatives, Asian Development Bank$ 1.1 billion, and Islamic Development Bank$ 1 billion, Pakistan tells the IMF.