Pakistan Faces IMF Concerns Over Loan Package Compliance

Pakistan's tax shortfall and delayed foreign loans have raised concerns with the IMF regarding the country's $7 billion loan package. Key issues include Punjab's agriculture income tax law misalignment, power distribution privatisation delays, and FBR's underperformance. Urgent energy sector reforms and adherence to fiscal policies are emphasized.

The International Monetary Fund (IMF) has expressed concern over Pakistan's implementation of a USD 7 billion loan package, citing tax shortfalls and delayed foreign loans as major issues. The IMF mission highlighted challenges surrounding Punjab's agriculture income tax law, which deviates from federal legislation, and other economic concerns.

During discussions, the IMF urged Pakistan to reach out to Riyadh for deferred oil payments and Beijing for debt rescheduling. It also stressed the importance of privatising power distribution companies and amending the Pakistan Sovereign Wealth Fund Act. Furthermore, flaws were noted in the National Fiscal Pact's implementation, specifically concerning income tax rate alignment among provinces.

The IMF highlighted the need for Pakistan to decrease state intervention, bolster competition, and implement urgent energy sector reforms. The organization surmised that strong program implementation could foster inclusive growth and improve standards of living in Pakistan.

(With inputs from agencies.)