IMF team expresses multiple concerns
Technical negotiations between International Monetary Fund team and Pakistan end.
ISLAMABAD:
Technical negotiations between the International Monetary Fund (IMF) and Pakistan have ended whilst policy negotiations between the country and the donor will be held once Adnan Mazarei, the head of the IMF review mission, reaches Pakistan.
The IMF’s team has been presented with data regarding the country’s performance in the first quarter of the current fiscal year and will prepare a note for the IMF review mission. Negotiations between the review mission and the country will be based upon the technical team’s assessment.
According to sources, the technical team expressed its reservations at the fact that a ten per cent income tax surcharge was not imposed to generate additional funds.
The team also said that the draft of the reformed general sales tax (RGST) bill was extremely complicated and offered to send international consultants to review the bill. Sources also told that the team to eliminate mistakes and legal complications from the bill. The IMF team was also informed of the agreement between the federation and provinces regarding the imposition of RGST in the country. The World Bank (WB) and Asian Development Bank (ADB) had earlier expressed their reservations about the RGST bill along the same lines. The imposition of RGST is linked to aid from the WB and funds from the IMF.
Sources also said that the IMF team has expressed its qualms about increasing government expenditures and emphasized the need to keep fiscal deficits to a minimum, mobilize resources to increase revenues and control expenses.
According to sources, the IMF team was informed that tax collection for the first quarter of 2011 was Rs294 billion which was a billion more than the IMF target of Rs293 billion. Indirect taxes contributed Rs198 billion towards the target, while income tax receipts were Rs95.7 billion. The target set by the international body for the second quarter of this fiscal year is Rs361 billion, of which indirect taxes collection constitutes Rs214 billion and direct tax collection makes up Rs147 billion.
The utilization of relief, reconstruction and rehabilitation expenditures and funds for areas affected by floods was also discussed by the two delegations. The IMF team asked for a breakup of funds provided by the federation and by the provinces.
The technical team is due to meet Federal Minister for Finance Dr Abdul Hafeez Shaikh today on Friday. State Bank of Pakistan (SBP) Governor Shahid Kardar will also be present at this meeting, along with other important government officials.
Published in The Express Tribune, October 29th, 2010.
Technical negotiations between the International Monetary Fund (IMF) and Pakistan have ended whilst policy negotiations between the country and the donor will be held once Adnan Mazarei, the head of the IMF review mission, reaches Pakistan.
The IMF’s team has been presented with data regarding the country’s performance in the first quarter of the current fiscal year and will prepare a note for the IMF review mission. Negotiations between the review mission and the country will be based upon the technical team’s assessment.
According to sources, the technical team expressed its reservations at the fact that a ten per cent income tax surcharge was not imposed to generate additional funds.
The team also said that the draft of the reformed general sales tax (RGST) bill was extremely complicated and offered to send international consultants to review the bill. Sources also told that the team to eliminate mistakes and legal complications from the bill. The IMF team was also informed of the agreement between the federation and provinces regarding the imposition of RGST in the country. The World Bank (WB) and Asian Development Bank (ADB) had earlier expressed their reservations about the RGST bill along the same lines. The imposition of RGST is linked to aid from the WB and funds from the IMF.
Sources also said that the IMF team has expressed its qualms about increasing government expenditures and emphasized the need to keep fiscal deficits to a minimum, mobilize resources to increase revenues and control expenses.
According to sources, the IMF team was informed that tax collection for the first quarter of 2011 was Rs294 billion which was a billion more than the IMF target of Rs293 billion. Indirect taxes contributed Rs198 billion towards the target, while income tax receipts were Rs95.7 billion. The target set by the international body for the second quarter of this fiscal year is Rs361 billion, of which indirect taxes collection constitutes Rs214 billion and direct tax collection makes up Rs147 billion.
The utilization of relief, reconstruction and rehabilitation expenditures and funds for areas affected by floods was also discussed by the two delegations. The IMF team asked for a breakup of funds provided by the federation and by the provinces.
The technical team is due to meet Federal Minister for Finance Dr Abdul Hafeez Shaikh today on Friday. State Bank of Pakistan (SBP) Governor Shahid Kardar will also be present at this meeting, along with other important government officials.
Published in The Express Tribune, October 29th, 2010.