ISLAMABAD - Pakistan has assured the International Monetary Fund (IMF) for generating provincial budget surplus and managing external financing during the current fiscal year.
The talks between Pakistan and IMF continued from November 11 to November 15 in Islamabad, which covered a wide range of economic issues, including provincial budgets, tax reforms, and foreign financing arrangements. The Fund’s staff visited Pakistan to discuss recent developments and Extended Fund Facility (EFF) programme performance to date. This mission was not part of the first review under the $7 billion EFF, which will be no earlier than the first quarter of 2025.
The Ministry of Finance said: “We have managed to convince the IMF mission on the provincial surplus.” It said that the government of Punjab has remained one of the most important contributors to provincial surplus during recent years; for FY 2024-25 it has budgeted a provincial surplus of Rs. 630 billion as agreed with the IMF. It is highlighted that the finance ministry shared the updated Q1 fiscal operations figures with the IMF on 14th November, 2024. With concurrence of the Fund, MoF has updated the revised figures at its website, showing a provincial surplus of Rs. 40 billion for Punjab.
It is further pointed out that as per the revised figures agreed with the Fund; the Government of Pakistan has managed to achieve a cumulative provincial surplus of Rs. 360 billion against a target of Rs. 342 billion agreed with the IMF for Q1 for FY 2024-25.
Meanwhile, officials informed that the IMF has asked Pakistan for the tax collection on agricultural income from the start of next year. The Punjab Assembly has already done some legislation in this regard. The IMF has asked for the timely passage of laws, particularly in Sindh, urging the provincial government to expedite legislation. Khyber Pakhtunkhwa has made progress in its preparatory work.
According to the officials, Pakistan assured the IMF of securing external financing to support its fiscal policies. “The government has made firm commitments regarding external financing arrangements.
On the final day of talks, the federal finance minister and officials from the Federal Board of Revenue (FBR) participated in the discussions with provincial representatives. The discussions also centred around the government’s tax collection targets. Pakistan is aiming to meet a tax target of Rs 12,970 billion, with efforts to accelerate collection procedures.
