ISLAMABAD, Feb 15 (EW): The federal government has convened a session of the National Assembly today after President Arif Alvi refused to approve the ordinance regarding the imposition of new taxes.
A meeting of the federal cabinet was presided over by Prime Minister Shehbaz Sharif in which the country’s economic and political situation came under discussion. The meeting participants also held consultation on the ordinance related to mini-budget. The cabinet decided not to bring mini-budget ordinance.
The finance bill will be presented in the national assembly and Finance Minister Ishaq Dar will brief the House regarding the bill. The mini-budget will be presented in the Senate tomorrow (Wednesday) after passage from the Lower House of the Parliament.
In this regard, Senate session has also been called in tomorrow at 4pm under the chair of Chairman Sadiq Sanjrani. The finance bill has proposed imposing taxes worth Rs170 billion, while the cabinet has already approved the financial bill to impose new taxes.
Earlier today, President Arif Alvi held a meeting with Finance Minister Ishaq Dar in which the latter briefed the head of the state on the ongoing dialogue with the International Monetary Fund.
The president appreciated the efforts of the government regarding a probable deal with the IMF while mentioning the state would abide by the promises made by the world’s financial body.
The minister added the government wanted to impose new taxes through the ordinance. The president refused the request of the government.
Dr Alvi asked the financial czar to take the parliament in confidence regarding the budgetary recommendations. He asked Dar to immediately summon a parliament session to pass a bill at the earliest.
It may be mentioned here that the mini-budget is being introduced as per the directions of the International Monetary Fund (IMF) which wants Pakistan to increase its revenue and broaden the tax net.
To meet yet another demand of the IMF , the government on February 13 had already increased prices of gas and electricity thus putting an extra burden on ordinary people.
On the other hand, Pakistan and the International Monetary Fund (IMF) have resumed their talks over the release of the ninth tranche of the Extended Fund Facility (EFF).
The federal government hopes that these virtual discussions will lead to a deal that eases up ever-increasing pressure on the country’s ailing economy.
Finance Secretary Hamed Yaqoob Sheikh said the “duration (of the talks) cannot be confirmed but we intend to wrap these up at the soonest”. Islamabad held 10 days of intensive talks with an IMF delegation – from Jan 31 to Feb 9 – but could not reach a deal.
The IMF, however, said in an earlier statement that both sides had agreed to stay engaged and “virtual discussions will continue in the coming days to finalise the implementation details” of the policies discussed in Islamabad.
Talks between the International Monetary Fund and Pakistan were to be resumed virtually as the two sides look to reach a deal to unlock funding critical to keep the cash-strapped south Asian country afloat.
A Pakistani official told the internarional wire service on Monday that the two sides could not reach a deal last week and a visiting IMF delegation departed Islamabad after 10 days of talks, but said negotiations would continue. Pakistan is in dire need of funds as it battles a wrenching economic crisis.
“Duration (of the talks) cannot be confirmed but we intend to wrap these up at the soonest,” Finance Secretary Hamed Yaqoob Sheikh told Reuters in a text message, confirming that talks were resuming on Monday.
Talks centre around reaching an agreement on a reforms agenda under the country’s $6.5 bailout programme, which it entered in 2019. An agreement on the ninth review of the programme would release over $1.1 billion.
IMF statement
On Friday, IMF had issued a short four-paragraph statement at the conclusion of its mission’s 10-day visit to Islamabad, stressing that “timely and decisive implementation of policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability”.
It had added that virtual discussions will continue to finalise the implementation details of policies, implying that an agreement to revive the programme through a staff-level agreement may still take some time as Pakistan moves to execute the prior actions.
“The IMF team welcomes the Prime Minister’s commitment to implement policies needed to safeguard macroeconomic stability and thanks the authorities for the constructive discussions,” the mission chief’s, Nathan Porter, was quoted as saying in the statement.
“Considerable progress was made during the mission on policy measures to address domestic and external imbalances.
“Key priorities include strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies, while scaling up social protection to help the most vulnerable and those affected by the floods; allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage; and enhancing energy provision by preventing further accumulation of circular debt and ensuring the viability of the energy sector.
“The timely and decisive implementation of these policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development.”
