ISLAMABAD 9th July: Pakistan has committed to further increase electricity tariff from next month (August) and is also bound to fully implement the Financial Action Task Force’s (FATF) 27-point action plan in three months as part of the $6 billion programme conditions, reveals an International Monetary Fund (IMF) report.
The staff-level report further disclosed that against the Pakistan Tehreek-e-Insaf (PTI) government’s claim of imposing Rs516 billion taxes, the actual tax measures amounted to a record Rs733.5 billion, which undermined the credibility of the government in the eyes of the legislators and the public.
The report stated that since May 16, 2019 Pakistan had enforced “market-determined” exchange rate regime – a fact that the State Bank of Pakistan was shy to admit.
Hike in power tariff of Rs2.50 per unit on the cards
Under the 39-month $6 billion package, there would also be a permanent ban on giving any new tax amnesty scheme and Pakistan was also bound to implement the value-added tax regime as against the current general sales tax regime.
The IMF has released the staff-level report five days after its Executive Board approved the $6 billion bailout package to help the country meet its international debt obligations. Under the three-year programme, Pakistan would receive $38 billion in loans from all creditors.
The IMF will monitor implementation of conditions through 13 quarterly performance criteria and continuous performance criteria.
One of them is to show net Rs1.071 trillion tax collection by the Federal Board of Revenue (FBR) by the end of September in order to achieve Rs5.503 trillion annual target by June next year.
Prime Minister Imran Khan on Monday elevated Hammad Azhar as the new federal revenue minister after withdrawing the Revenue Division portfolio from Dr Hafeez Shaikh. This has brought new dynamics to power politics where Shaikh is only left with the Economic Affairs Division and the Finance Division.
The effectiveness of Pakistan’s anti-money laundering and combating financing of terrorism regime must be urgently strengthened to support its exit from the FATF list of jurisdictions with serious deficiencies, stated the IMF.
The report showed that the IMF placed a structural benchmark “to implement all measures committed to in an action plan with the FATF by the end of October 2019”.