ISLAMABAD: The International Monetary Fund (IMF) mission is anticipated to visit Pakistan by late February or early March for the first review of the $7 billion Extended Fund Facility (EFF), according to Federal Finance Minister Muhammad Aurangzeb. Speaking to the media on Wednesday, he stated that while no official date has been confirmed, the visit is likely within this timeframe.
As per the IMF report released in October, the scheduled first review under the EFF, along with the end-December 2024 performance and continuous criteria, is set for March 15, 2025.
During a briefing to the Senate Standing Committee on Finance and Revenue, chaired by Saleem Mandviwalla, Aurangzeb emphasized Pakistan’s commitment to the three-year IMF program, stating that some measures might be phased into the 2025-26 budget, while others may be implemented later.
He also announced the government’s plan to separate tax policy from the Federal Board of Revenue (FBR) operations in the next fiscal year. This move aims to enhance the FBR’s efficiency by allowing it to focus exclusively on tax collection.
Addressing concerns over tax burdens, Aurangzeb acknowledged the “disproportionately high burden” on salaried individuals and affirmed the government’s efforts to simplify tax procedures and provide relief. He noted that 60-70% of employees are not subject to the super tax.
The committee further deliberated on the possibility of converting some existing taxes into a carbon tax. While the finance minister acknowledged the World Bank’s Country Partnership Framework, which includes climate and carbon-related policies, concerns were raised about the potential inflationary impact of a carbon tax, particularly on lower-income groups.
Aurangzeb also provided details on industrial gas price hikes, stating that out of 56,000 industrial units, 1,100 Captive Power Plants faced an increase in gas prices to Rs3,500.
The meeting also addressed tax system reforms aimed at reducing administrative burdens while ensuring efficient tax collection. Additionally, Aurangzeb highlighted a shift in budget planning, making the process more inclusive and transparent by initiating consultations in January rather than April. Government departments, business chambers, and forums like the PBC have been invited to contribute their recommendations.
Finance Secretary Imdadullah Bosal, briefing on the Public Sector Development Programme (PSDP), stated that no new budget has been proposed for 2025-26. However, five ongoing PSDP projects under the Finance Division will continue, with an allocation of Rs3.1 billion.
The effectiveness of training programs for FBR officers, ongoing for over two decades, was also questioned by the committee. Chairman Mandviwalla inquired about their impact, prompting a request for detailed reports on outcomes. In response, Finance Secretary Bosal assured that comprehensive data on these programs would be provided.
