PM Sharif to meet IMF chief in Dubai
The high-level contact comes at a time when the Shehbaz Sharif-led government is facing pressure from the real estate sector to lower transaction taxes on plots and lobbying from the business community to let the economy grow. photo: file
Prime Minister Shehbaz Sharif and the Managing Director (MD) of the International Monetary Fund (IMF), Kristalina Georgieva, will meet today (Tuesday) in Dubaithree weeks ahead of the expected March 3 start of review talks for the $1 billion second loan tranche.
Government and diplomatic sources told The Express Tribune that the meeting would take place on the sidelines of the World Governments' Summit in Dubai. Pakistan has requested the meeting.
This will be the third meeting between PM Sharif and Georgieva in the past 10 months. The prime minister departed on Monday for a two-day official visit to the United Arab Emirates (UAE) to attend the summit.
The UAE government is organising the event, inviting a large number of heads of state and government, global policymakers, and leading private sector figures to discuss the future of governance, innovation, and international cooperation.
The prime minister is accompanied by a high-level delegation, including Deputy Prime Minister Ishaq Dar and other key cabinet members. Finance Minister Muhammad Aurangzeb has been asked to join the meeting upon his return from Lisbon, Portugal.
The purpose of the meeting between the IMF MD and PM Sharif was not immediately known, and it is taking place three weeks before the scheduled talks under the first programme review of the $7 billion deal.
Neither the IMF nor the Ministry of Finance commented on the meeting between to officials.
In September last year, the prime minister also met Georgieva on the sidelines of the United Nations General Assembly in New York. At the time, the IMF MD had expressed the Fund's support for Pakistan's economic efforts and emphasised the importance of maintaining macroeconomic stability and promoting inclusive and sustainable growth.
The high-level contact comes at a time when the Shehbaz Sharif-led government is facing pressure from the real estate sector to lower transaction taxes on plots and lobbying from the business community to let the economy grow.
PM Sharif has twice postponed a scheduled meeting last week in which he was to decide whether or not to reduce income tax rates for the real estate sector and abolish the federal excise duty. Instead, the prime minister formed a cabinet-led task force to recommend tax relaxations for the real estate sector. Meanwhile, Pakistan's salaried class remains the hardest hit by inflation, rising living costs, and heavy taxation. However, PM Sharif has not constituted any task force to address their concerns or alleviate their sufferings.
Teachers are also protesting the government's decision to withdraw a 25% income tax rebate and recover arrears dating back to July 2022. Pakistan and the IMF plan to begin first review talks from March 3 to 14 in Islamabad, according to government sources.
Finance Minister Muhammad Aurangzeb recently stated that the talks would commence in the first week of March. The government remains hopeful for successful negotiations, particularly after the introduction of the Agriculture Income Tax legislation in Sindh and the resolution of gas prices for in-house power generation plants.
The federal and provincial governments have met conditions related to maintaining a primary budget surplus, cash surplus, and increased provincial taxes. However, concerns remain over the Federal Board of Revenue (FBR)'s performance in the upcoming review talks, sources said.
There are also outstanding issues regarding amendments to the Pakistan Sovereign Wealth Fund Act. Nonetheless, Pakistani authorities are confident about the success of the talks. A successful review would also benefit the IMF staff, as it would prevent the programme from falling apart within its first six months, sources added.
An IMF Mission on Governance and Corruption Diagnosis Assessment is already in Pakistan. On Monday, it held meetings with the Financial Monitoring Unit and the Money-Laundering and Combating of Financing of Terrorism Authority. The mission is also scheduled to meet with the Supreme Court and the Judicial Commission of Pakistan this week.
Sources said that after the ongoing assessment mission concludes on February 14, another full-scale follow-up mission may visit in April to hold further meetings and finalise recommendations.
Pakistan will publish the assessment report in July, and its recommendations may add further conditions to the already agreed-upon 40 conditions. The government must implement these measures to secure the $7 billion loan over three years.