The Ministry of Finance is gearing up for significant discussions with the International Monetary Fund’s (IMF) review mission, slated to commence shortly after the federal cabinet is sworn in.
A formal invitation will be extended to the IMF, based in Washington, D.C., once the cabinet formation process is completed, as reported by The News.
Sources close to the situation revealed that the IMF is anticipating an official invite from Islamabad.
Following the cabinet’s establishment, an IMF delegation is expected to visit Islamabad to initiate negotiations for the second review under the existing $3 billion Standby Arrangement (SBA) program.
Concurrently, Pakistan plans to negotiate a new agreement under the 36-month Extended Fund Facility (EFF), aiming to potentially increase the program size from $6 billion to $8 billion with the inclusion of climate finance.
The immediate challenge for the incoming finance minister involves meeting the Federal Board of Revenue’s (FBR) tax collection target of Rs890 billion for March 2024.
Failure to meet this quarterly target may lead to the IMF proposing additional taxation measures for the fiscal year’s remainder.
Prime Minister Shehbaz Sharif has already chaired a meeting to discuss future strategies for tax system reform, emphasizing the need for automation and digitalization within the FBR to enhance transparency and efficiency.
Despite collecting Rs5.82 trillion in the first eight months of the fiscal year, the FBR faced a shortfall of Rs33 billion for February 2024 and needs to collect Rs3.58 trillion in the next four months to achieve the annual target of Rs9.415 trillion.
The Prime Minister has directed the immediate commencement of the FBR’s automation and digitalization, suggesting the adoption of leading global practices and the engagement of international firms for this purpose.
