ISLAMABAD: Finance Minister Ishaq Dar on Friday assured the National Assembly that no new tax would be introduced for the agricultural and construction sectors as part of the nine-month Stand-by Arrangement (SBA) with the International Monetary Fund (IMF).
Speaking on the National Assembly (NA) floor on Friday, the finance minister said that he had “promised in the budget that whatever agreement is reached with the IMF will be presented before the parliament”.
Dar said three copies of documents signed with the IMF have been placed in the National Assembly’s library as he noted the “positive role” played by members of parliament in securing the SBA.
Stressing the government’s commitment to transparency, Dar said that all documents have also been made available on the Finance Ministry’s website.
“Due to non-implementation of the conditions (set with the IMF) on the part of the previous government, many difficulties were faced by this government,” he said.
“When our government came, there were reserves of $14 billion dollars. we are committed to leaving the country’s reserves in a better state,” he added. “We hope that when the new government comes, this IMF program will be over.”
The finance minister also said that no tax will be levied on the construction and agriculture sectors and that efforts were afoot to reduce inflation in the country.
“The inflation rate can come down to as low as 7%,” the minister said as he presented the document of the IMF agreement noting that there are 11 or 12 reviews of the agreement.
“We are trying our level best that a 9th review of the IMF agreement can be completed,” said Dar.
Last month the government reached a staff-level pact with the IMF, a decision long awaited by the South Asian nation which is teetering on the brink of default.
The deal had come after an eight-month delay and offers some respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves.
Islamabad has taken a slew of policy measures since an IMF team arrived in Pakistan earlier this year, including a revised 2023-24 budget last week to meet the lender’s demands.
Other adjustments demanded by the IMF before clinching the deal included reversing subsidies in power and export sectors, hikes in energy and fuel prices, jacking up the key policy rate to 22%, a market-based currency exchange rate and arranging for external financing.
It also got Pakistan to raise over 385 billion rupees ($1.34 billion) in new taxation through a supplementary budget for the 2022-23 fiscal year and the revised budget for 2023-24.
Going forward, the IMF said, the central bank should remain pro-active to reduce inflation and maintain a foreign exchange framework.
The painful adjustments have already fuelled all-time high inflation of 38% year-on-year in May.
