ISLAMABAD    -    Policy level talks between Pakistan and International Monetary Fund (IMF) have started on Monday in Islamabad, which would decide the fate of releasing next tranche of $453 million for Islamabad.

The IMF team had arrived Pakistan last week for first quarterly review of Islamabad’s performance under its $6bn Extended Fund Facility (EFF). The IMF in July this year had approved a three-year, $6 billion loan to support Pakistan’s economic plan.

Pakistan would receive $453 billion if it satisfies the Fund on economic situation during first quarter (July to September) of the current fiscal year. Pakistan had already received an upfront disbursement of $991 million on completion of all prior actions committed by Pakistan before signing the fund programme.

Pakistan has requested the visiting delegation to revise the annual tax collection target by some Rs300 billion. The government wants to reduce the tax collection target to Rs5.2 trillion after Federal Board of Revenue (FBR) had faced massive shortfall in four months of current fiscal year.

The FBR had collected Rs1283 billion in July to October period of the ongoing fiscal year as against the target of Rs1448 billion. The FBR has faced Rs165 billion shortfalls in four months period.

During the talks, the IMF had asked Pakistan’s federal and provincial authorities to introduce a single tax base and make full use of development funds as ‘stimulus’ to revive economic growth. The IMF had suggested that Pakistan should introduce uniform tax rates and a single tax administration instead of two or three tax authorities in each province.

It had also emphasised upon harmonisation in the tax system and creation of a single tax base as it directly impacted on the ease of doing business and went a long way in creating an enabling business environment and boosting confidence of the investors and businessmen.