SLAMABAD: The much-anticipated meeting between the Pakistani and IMF officials was held here on Saturday and despite the gloomy prognosis of many observers it is said to have gone well.
Dawn has learnt that the Pakistani officials who attended the meeting are confident that they have been able to convince the IMF team about the government’s sincerity in meeting the targets agreed upon with the donor agency, ensuring that the world body would release the next tranche on time.
The Pakistani side was led by Finance Minister Dr Abdul Hafeez Sheikh and the IMF team by Executive Director Dr Jaffar Mojarrad.
The Pakistani officials briefed the IMF team on the state of country’s economy and the progress made by the government on the economic reforms being taken under the Standby Arrangement (SBA).
The thorny issue discussed at the meeting was Pakistan’s failure, so far, to implement the GST. The IMF’s foremost demand is that the government increase its tax base and improve its revenue collection. The tax has been delayed because of opposition from provinces.
According to the Pakistani officials, the IMF delegation had been assured that government’s discussions with provinces on the implementation of reformed GST/VAT would yield positive results by the end of this month.
They said the team had been assured that the key economic reforms, including implementation of reformed GST to increase revenue generation were on track; and talks were underway with provinces to settle all disputed issues.
“The government has decided to implement the reformed GST so that it can replace the proposed VAT mode from the second quarter of current fiscal year, which begins in October,” they officials said.
However, Dawn has learnt that the government’s assurances were not enough to satisfy the sceptical IMF team because the fund does not have much faith in Pakistan’s ability to stick to its economic goals.
The IMF team expressed concern over the high percentage of differential between electricity being provided to consumers and payment being received against it as well as electricity losses due to poor distribution system.
The IMF delegates pointed out that the national electricity sector recovered only 67 per cent of the bills generated whereas the average line loss was around 20 per cent. In their opinion, the power sector witnessed losses of more than 50 per cent
Dawn has learnt that the Pakistani officials who attended the meeting are confident that they have been able to convince the IMF team about the government’s sincerity in meeting the targets agreed upon with the donor agency, ensuring that the world body would release the next tranche on time.
The Pakistani side was led by Finance Minister Dr Abdul Hafeez Sheikh and the IMF team by Executive Director Dr Jaffar Mojarrad.
The Pakistani officials briefed the IMF team on the state of country’s economy and the progress made by the government on the economic reforms being taken under the Standby Arrangement (SBA).
The thorny issue discussed at the meeting was Pakistan’s failure, so far, to implement the GST. The IMF’s foremost demand is that the government increase its tax base and improve its revenue collection. The tax has been delayed because of opposition from provinces.
According to the Pakistani officials, the IMF delegation had been assured that government’s discussions with provinces on the implementation of reformed GST/VAT would yield positive results by the end of this month.
They said the team had been assured that the key economic reforms, including implementation of reformed GST to increase revenue generation were on track; and talks were underway with provinces to settle all disputed issues.
“The government has decided to implement the reformed GST so that it can replace the proposed VAT mode from the second quarter of current fiscal year, which begins in October,” they officials said.
However, Dawn has learnt that the government’s assurances were not enough to satisfy the sceptical IMF team because the fund does not have much faith in Pakistan’s ability to stick to its economic goals.
The IMF team expressed concern over the high percentage of differential between electricity being provided to consumers and payment being received against it as well as electricity losses due to poor distribution system.
The IMF delegates pointed out that the national electricity sector recovered only 67 per cent of the bills generated whereas the average line loss was around 20 per cent. In their opinion, the power sector witnessed losses of more than 50 per cent
-www.dawn.com
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