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IMF RR Teresa Sanchez to meet customs, SBP officials tomorrow

IMF RR Teresa Sanchez to meet customs, SBP officials tomorrow

ISLAMABAD:  The International Monetary Fund (IMF) Resident Representative Teresa Dabam Sanchez will visit Large Taxpayers Unit (LTU) Karachi and the Pakistan Customs House Karachi on Tuesday to review compliance with the IMF bailout package conditions.

According to the details, the IMF Resident Representative Office has informed the Federal Board of Revenue (FBR) in writing. During the visit, the IMF official will hold meetings with the LTU Karachi chief commissioner and other officials as well as the State Bank of Pakistan (SBP) officials.

The IMF transferred first tranche [of $991.4 million] of its new bailout package to the SBP on July 10 while also issuing details of the conditions of its agreement with Pakistan.

According to the IMF, Pakistan has agreed to further increase the price of electricity from the next month. The government will also not be able to announce any new tax amnesty scheme during the 36 months in which the lender will issue $6 billion to Pakistan.

The IMF report reveals Pakistan will impose Rs733.5 billion taxes contrary to the government’s claim of Rs516 billion. The report says the government already implemented the condition to adopt a policy of open exchange rate on May 16. Pakistan is also liable to impose Value Added Tax in place of GST.

The IMF staff-level report, which was released 5 days after the agreement, also says the lender will monitor implementation of its conditions. One of the conditions states that the FBR would collect Rs1.071 trillion taxes till the end of September so that the annual target of Rs.5.503 trillion could be achieved in June next year.

The IMF also makes it necessary for Pakistan to implement the Financial Action Task Force’s (FATF) 27-point action plan to stop money laundering and terror financing.

The report further reveals that from July, the government will further increase electricity prices by 11% to generate revenues of Rs150 billion. The government is also bound to amend the National Electric Power Regulatory Authority (Nepra) Act before December end to ensure continuity of tariff adjustment.