ISLAMABAD - Pakistan and IMF talks under Post Programme Monitoring would start from Tuesday (today) wherein the Fund would review Islamabad’s capacity to repay loans, it was learnt.

The IMF delegation was scheduled to arrive Islamabad today (Tuesday) for Post Programme Monitoring (PPM) of 2008 approved Stand-By-Arrangement (SBA). However Adviser to the Finance Ministry and Spokesperson Rana Assad Amin was unaware about the IMF’s mission schedule in Pakistan. However, sources said that Post Programme Monitoring mission of the International Monetary Fund (IMF) would review the Pakistan’s capacity to repay the loans during their visit to Islamabad from Tuesday.

Post Programme Monitoring mission of IMF reviews the Pakistan’s capacity to repay the loans after every six months.

Sources said that Islamabad might initiate discussion for fresh bailout package in order to improve its balance of payment situation. Pakistan would likely to present detail report regarding economic situation of the country during the first half (July-December) of the ongoing financial year 2012-13 before he IMF team.

Sources informed that Pakistan’s economic team would brief IMF on the proposed tax amnesty scheme to bring 2.9 million non-taxpayers into tax net by whitening their black money against a nominal one-time charge. The scheme was earlier opposed by the Fund. The IMF in last meeting asked Pakistan to take action against non-taxpayers instead of announcing amnesty scheme if Federal Board of Revenue (FBR) has data of 2.9 million non-taxpayers.

Sources were of the view that Pakistan might face criticism over huge subsidy given to the power sector in the first half (July-December) of ongoing financial year 2012-13, as government has given over Rs 161 billion to the power sector in six months as against Rs 185 billion to be released in whole financial year.

Sources further informed that Pakistan might request for fresh bailout package to improve its balance of payment situation. Pakistan’s foreign exchange reserves are under severe pressure due to repayment to IMF, as Islamabad has repaid $ 2.5 billion to the Fund since 2008 while it has to further repay $1.7 billion before June 30 2013. The country’s total liquid foreign reserves as on December 28 reduced to $13.808 billion from $18 billion of year and half back.

Pakistan entered into a $7.6 billion IMF bailout package in 2008, which was increased to $11.3 billion but the country was not eligible for the last two disbursements of $3.4 billion due to failure to comply with the performance criteria. The government was failed to bring reforms in General Sales Tax (GST) and power sector, which became the reason in suspending programme.