President says state will stand by govt’s commitments with IMF n Advises finance minister to immediately call Parliament’s session ‘so that the bill is enacted without delay’.

ISLAMABAD    -   Federal Minister for Finance and Revenue Senator Muham­mad Ishaq Dar called on Presi­dent Arif Alvi on Tuesday and ap­prised him about the progress in talks with the International Mon­etary Fund (IMF) and that all mo­dalities have been agreed upon.

According to a statement is­sued by the Office of the Presi­dent of Pakistan on Twitter, “the president appreciated the ef­forts of the government for an agreement with the IMF, and as­sured that the state of Pakistan would stand by the commit­ments made by the government with the IMF.”

“The minister informed that the Government wanted to raise additional revenue through tax­es by promulgating an ordi­nance. The President advised that it would be more appropri­ate to take the Parliament into confidence on this important subject, and that a session be called immediately so that the bill is enacted without delay.” 

Following President Dr Arif Alvi’s advice to present the ‘mini-budget ordinance’ in the parliament, the federal govern­ment has decided to table the bill in the legislature for approv­al as it scrambles to meet the International Monetary Fund’s (IMF) pre-conditions for the stalled $1.1 billion loan.

Pakistan and the IMF will re­sume talks virtually next week after 10 days of face-to-face dis­cussions in Islamabad on how to keep the country afloat ended without a deal. Officials say the bills will be laid down before the National Assembly and Senate subsequently Wednesday (to­day), following which both hous­es will refer the matter to their respective finance committees 

for further deliberations.

President Dr Arif Alvi re­fused to promulgate an or­dinance to announce mini- budget to fulfil one of the conditions of the Internation­al Monetary Fund (IMF) to re­vive the much needed loan programme for Pakistan. Ac­cording to sources, the gov­ernment has now decided to bring mini-budget through Finance Bill in National As­sembly, which has been sum­moned today (Wednesday).

The IMF had linked the staff level agreement with the pri­or actions including increas­ing power and gas prices and announcing mini-budget to generate Rs170 billion in re­maining four months (March to April) of the current fiscal year. The government had al­ready enhanced the electric­ity and gas prices in last few days. Meanwhile, the gov­ernment had decided to an­nounce mini-budget through presidential ordinance. An of­ficial of the ministry of finance informed that the federal gov­ernment is exploring options for bringing mini-budget to comply with the IMF’s direc­tions. The taxation measures include one percent increase in the standard rate of sales tax from 17 percent to 18 percent and withholding tax on bank­ing transactions of non-filers. The proposal to raise the feder­al excise duty (FED) on sugary drinks would generate Rs60 billion. The revenue impact of the proposed withholding tax on banking transactions of non-filers is nearly Rs45 bil­lion. The FBR has worked out the revenue impact of Rs65 billion during Feb-June (2022-23) by increasing the stan­dard rate of one percent sales tax from 17 to 18 percent. The FBR has also proposed to raise the federal excise duty (FED) on imported and local­ly-assembled motor vehicles through the promulgation of the Tax Laws Amendment Or­dinance to generate addition­al revenue in ‘mini-budget’.

The revenue generation measure under consider­ation is to rationalise the rates of the FED on import­ed and locally-assembled motor vehicles. The FED on cigarettes would also be increased in the coming mini-budget.