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IMF comes down hard on Pakistan’s budget proposals

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.,.,.

IMF comes down hard on Pakistan’s budget proposals

  • Says draft misses opportunity to broaden tax base in progressive way
  • Criticises new tax amnesty scheme that runs against IMF programme’s conditionality/governance agenda, and creates a damaging precedent
Bilal Memon
June 15, 2023

The International Monetary Fund (IMF) has expressed its dissatisfaction with the budget proposals announced by Finance Minister Ishaq Dar for fiscal year 2023-24, calling them a missed opportunity to broaden the tax base while criticising the new amnesty scheme that “creates a damaging precedent”.

“The draft FY24 Budget misses an opportunity to broaden the tax base in a more progressive way,” Esther Perez Ruiz, the IMF Resident Representative for Pakistan, told Business Recorder via message on Thursday.

“The long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable (Benazir Income Support Programme) BISP recipients and development spending,” she added.

Perez Ruiz said the IMF remains engaged to discuss policies to maintain stability, and “it stands ready to work with the government in refining this budget ahead of its passage”.

Her statement comes as the IMF programme remains scheduled to end on June 30, a day before the new budget measures come into force with the start of the new fiscal year in Pakistan.

New ‘tax amnesty’


The IMF also came down hard on the new taxation proposal that seeks to enhance the limit in sub-section (4) of section 111 of the Income Tax Ordinance 2001 to rupee equivalent of US$100,000.

“Enhancement of monetary limit of foreign remittance remitted from outside Pakistan from five million rupees to rupee equivalent of USD 100,000 for the purpose of section 111(4) which places bar on asking nature and source of unexplained income/assets,” it says in the ‘Salient Features’ section of the Budget 2023-24 (Income tax Ordinance 2001).

Perez Ruiz said the amnesty runs against the IMF programme’s conditionality.

“The new tax amnesty runs against program’s conditionality and governance agenda and creates a damaging precedent.”

The IMF official also said measures to address the energy sector’s liquidity pressures could be included alongside the broader budget strategy.

The remarks from the Washington-based lender come at a time when policymakers in Pakistan are scrambling to secure dollar inflows. Reserves held by the central bank have fallen below $4 billion, and look set to decrease further, while the IMF programme remains stalled at the ninth review since November last year.

Talks of debt restructuring are picking pace, and Finance Minister Dar has moved to pacify markets several times, repeating the government’s stance of meeting all obligations in a timely manner.

Just a day ago, Moody’s Investors Service warned that Pakistan is at an increased risk of a failure to restart its bailout programme with the IMF, pushing the country closer to a sovereign default.

“There are increasing risks that Pakistan may be unable to complete the IMF programme that expires at the end of June,” Grace Lim, a sovereign analyst with the ratings company in Singapore, was quoted as saying by Bloomberg on Wednesday.

“Without an IMF programme, Pakistan could default, given its very weak reserves.”

Background

Pakistan had to satisfy the IMF on three counts, which included restoring the proper functioning of the foreign exchange market, pass a FY24 budget consistent with programme objectives, and secure firm and credible financing commitments to close the $6-billion financing gap ahead of the Board meeting.

Pakistan did not feature on the IMF Executive Board calendar as of Thursday morning.

Perez Ruiz had earlier already stated that there was only time for one last IMF board review before the scheduled end of the $6.5-billion Extended Fund Facility (EFF). Many analysts saw this as the IMF’s way of saying that Pakistan would only see a part of the remaining $2.5 billion awaited in disbursement.


 
My goodness, our country needs to be saved.

Don't our economists know basic economics?
Have an export driven economy.

Exports should exceed imports, lol.
 
.,.,.

IMF comes down hard on Pakistan’s budget proposals

  • Says draft misses opportunity to broaden tax base in progressive way
  • Criticises new tax amnesty scheme that runs against IMF programme’s conditionality/governance agenda, and creates a damaging precedent
Bilal Memon
June 15, 2023

The International Monetary Fund (IMF) has expressed its dissatisfaction with the budget proposals announced by Finance Minister Ishaq Dar for fiscal year 2023-24, calling them a missed opportunity to broaden the tax base while criticising the new amnesty scheme that “creates a damaging precedent”.

“The draft FY24 Budget misses an opportunity to broaden the tax base in a more progressive way,” Esther Perez Ruiz, the IMF Resident Representative for Pakistan, told Business Recorder via message on Thursday.

“The long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable (Benazir Income Support Programme) BISP recipients and development spending,” she added.

Perez Ruiz said the IMF remains engaged to discuss policies to maintain stability, and “it stands ready to work with the government in refining this budget ahead of its passage”.

Her statement comes as the IMF programme remains scheduled to end on June 30, a day before the new budget measures come into force with the start of the new fiscal year in Pakistan.

New ‘tax amnesty’

The IMF also came down hard on the new taxation proposal that seeks to enhance the limit in sub-section (4) of section 111 of the Income Tax Ordinance 2001 to rupee equivalent of US$100,000.

“Enhancement of monetary limit of foreign remittance remitted from outside Pakistan from five million rupees to rupee equivalent of USD 100,000 for the purpose of section 111(4) which places bar on asking nature and source of unexplained income/assets,” it says in the ‘Salient Features’ section of the Budget 2023-24 (Income tax Ordinance 2001).

Perez Ruiz said the amnesty runs against the IMF programme’s conditionality.

“The new tax amnesty runs against program’s conditionality and governance agenda and creates a damaging precedent.”

The IMF official also said measures to address the energy sector’s liquidity pressures could be included alongside the broader budget strategy.

The remarks from the Washington-based lender come at a time when policymakers in Pakistan are scrambling to secure dollar inflows. Reserves held by the central bank have fallen below $4 billion, and look set to decrease further, while the IMF programme remains stalled at the ninth review since November last year.

Talks of debt restructuring are picking pace, and Finance Minister Dar has moved to pacify markets several times, repeating the government’s stance of meeting all obligations in a timely manner.

Just a day ago, Moody’s Investors Service warned that Pakistan is at an increased risk of a failure to restart its bailout programme with the IMF, pushing the country closer to a sovereign default.

“There are increasing risks that Pakistan may be unable to complete the IMF programme that expires at the end of June,” Grace Lim, a sovereign analyst with the ratings company in Singapore, was quoted as saying by Bloomberg on Wednesday.

“Without an IMF programme, Pakistan could default, given its very weak reserves.”

Background

Pakistan had to satisfy the IMF on three counts, which included restoring the proper functioning of the foreign exchange market, pass a FY24 budget consistent with programme objectives, and secure firm and credible financing commitments to close the $6-billion financing gap ahead of the Board meeting.

Pakistan did not feature on the IMF Executive Board calendar as of Thursday morning.

Perez Ruiz had earlier already stated that there was only time for one last IMF board review before the scheduled end of the $6.5-billion Extended Fund Facility (EFF). Many analysts saw this as the IMF’s way of saying that Pakistan would only see a part of the remaining $2.5 billion awaited in disbursement.


I think this represents final divorce between IMF and Pakistan due to irreconcilable differences. Road to default will be quick.
 
.,.,.
IMF deal to be signed imminently...

imf-deal-to-be-signed-imminently-v0-uq3c960ziw5b1.jpg
 
This is what happens when you put thieves in charge of finances/money. They just can't help steal instead of making an honest effort to fix things.

For Sepoys this is a small price to pay in order to preserve their empire of perks, privilege and loyal colonial service built over 250 years.
 
This is what happens when you put thieves in charge of finances/money. They just can't help steal instead of making an honest effort to fix things.

For Sepoys this is a small price to pay in order to preserve their empire of perks, privilege and loyal colonial service built over 250 years.

How long do you think the perks will last for the junta in the current circumstances?
 
when belly gets hungry then the body must seek other bodies to eat to fill. the ppl will eat the corrupt rich fat jenrals and fat nawajas.
 
.,.,.

IMF comes down hard on Pakistan’s budget proposals

  • Says draft misses opportunity to broaden tax base in progressive way
  • Criticises new tax amnesty scheme that runs against IMF programme’s conditionality/governance agenda, and creates a damaging precedent
Bilal Memon
June 15, 2023

The International Monetary Fund (IMF) has expressed its dissatisfaction with the budget proposals announced by Finance Minister Ishaq Dar for fiscal year 2023-24, calling them a missed opportunity to broaden the tax base while criticising the new amnesty scheme that “creates a damaging precedent”.

“The draft FY24 Budget misses an opportunity to broaden the tax base in a more progressive way,” Esther Perez Ruiz, the IMF Resident Representative for Pakistan, told Business Recorder via message on Thursday.

“The long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable (Benazir Income Support Programme) BISP recipients and development spending,” she added.

Perez Ruiz said the IMF remains engaged to discuss policies to maintain stability, and “it stands ready to work with the government in refining this budget ahead of its passage”.

Her statement comes as the IMF programme remains scheduled to end on June 30, a day before the new budget measures come into force with the start of the new fiscal year in Pakistan.

New ‘tax amnesty’

The IMF also came down hard on the new taxation proposal that seeks to enhance the limit in sub-section (4) of section 111 of the Income Tax Ordinance 2001 to rupee equivalent of US$100,000.

“Enhancement of monetary limit of foreign remittance remitted from outside Pakistan from five million rupees to rupee equivalent of USD 100,000 for the purpose of section 111(4) which places bar on asking nature and source of unexplained income/assets,” it says in the ‘Salient Features’ section of the Budget 2023-24 (Income tax Ordinance 2001).

Perez Ruiz said the amnesty runs against the IMF programme’s conditionality.

“The new tax amnesty runs against program’s conditionality and governance agenda and creates a damaging precedent.”

The IMF official also said measures to address the energy sector’s liquidity pressures could be included alongside the broader budget strategy.

The remarks from the Washington-based lender come at a time when policymakers in Pakistan are scrambling to secure dollar inflows. Reserves held by the central bank have fallen below $4 billion, and look set to decrease further, while the IMF programme remains stalled at the ninth review since November last year.

Talks of debt restructuring are picking pace, and Finance Minister Dar has moved to pacify markets several times, repeating the government’s stance of meeting all obligations in a timely manner.

Just a day ago, Moody’s Investors Service warned that Pakistan is at an increased risk of a failure to restart its bailout programme with the IMF, pushing the country closer to a sovereign default.

“There are increasing risks that Pakistan may be unable to complete the IMF programme that expires at the end of June,” Grace Lim, a sovereign analyst with the ratings company in Singapore, was quoted as saying by Bloomberg on Wednesday.

“Without an IMF programme, Pakistan could default, given its very weak reserves.”

Background

Pakistan had to satisfy the IMF on three counts, which included restoring the proper functioning of the foreign exchange market, pass a FY24 budget consistent with programme objectives, and secure firm and credible financing commitments to close the $6-billion financing gap ahead of the Board meeting.

Pakistan did not feature on the IMF Executive Board calendar as of Thursday morning.

Perez Ruiz had earlier already stated that there was only time for one last IMF board review before the scheduled end of the $6.5-billion Extended Fund Facility (EFF). Many analysts saw this as the IMF’s way of saying that Pakistan would only see a part of the remaining $2.5 billion awaited in disbursement.



Thank God for this. May IMF come down even harder. Smash the corrupt Pakistan
 
They are not listing even our COAS ??
 
.,.,.

IMF comes down hard on Pakistan’s budget proposals

  • Says draft misses opportunity to broaden tax base in progressive way
  • Criticises new tax amnesty scheme that runs against IMF programme’s conditionality/governance agenda, and creates a damaging precedent
Bilal Memon
June 15, 2023

The International Monetary Fund (IMF) has expressed its dissatisfaction with the budget proposals announced by Finance Minister Ishaq Dar for fiscal year 2023-24, calling them a missed opportunity to broaden the tax base while criticising the new amnesty scheme that “creates a damaging precedent”.

“The draft FY24 Budget misses an opportunity to broaden the tax base in a more progressive way,” Esther Perez Ruiz, the IMF Resident Representative for Pakistan, told Business Recorder via message on Thursday.

“The long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable (Benazir Income Support Programme) BISP recipients and development spending,” she added.

Perez Ruiz said the IMF remains engaged to discuss policies to maintain stability, and “it stands ready to work with the government in refining this budget ahead of its passage”.

Her statement comes as the IMF programme remains scheduled to end on June 30, a day before the new budget measures come into force with the start of the new fiscal year in Pakistan.

New ‘tax amnesty’

The IMF also came down hard on the new taxation proposal that seeks to enhance the limit in sub-section (4) of section 111 of the Income Tax Ordinance 2001 to rupee equivalent of US$100,000.

“Enhancement of monetary limit of foreign remittance remitted from outside Pakistan from five million rupees to rupee equivalent of USD 100,000 for the purpose of section 111(4) which places bar on asking nature and source of unexplained income/assets,” it says in the ‘Salient Features’ section of the Budget 2023-24 (Income tax Ordinance 2001).

Perez Ruiz said the amnesty runs against the IMF programme’s conditionality.

“The new tax amnesty runs against program’s conditionality and governance agenda and creates a damaging precedent.”

The IMF official also said measures to address the energy sector’s liquidity pressures could be included alongside the broader budget strategy.

The remarks from the Washington-based lender come at a time when policymakers in Pakistan are scrambling to secure dollar inflows. Reserves held by the central bank have fallen below $4 billion, and look set to decrease further, while the IMF programme remains stalled at the ninth review since November last year.

Talks of debt restructuring are picking pace, and Finance Minister Dar has moved to pacify markets several times, repeating the government’s stance of meeting all obligations in a timely manner.

Just a day ago, Moody’s Investors Service warned that Pakistan is at an increased risk of a failure to restart its bailout programme with the IMF, pushing the country closer to a sovereign default.

“There are increasing risks that Pakistan may be unable to complete the IMF programme that expires at the end of June,” Grace Lim, a sovereign analyst with the ratings company in Singapore, was quoted as saying by Bloomberg on Wednesday.

“Without an IMF programme, Pakistan could default, given its very weak reserves.”

Background

Pakistan had to satisfy the IMF on three counts, which included restoring the proper functioning of the foreign exchange market, pass a FY24 budget consistent with programme objectives, and secure firm and credible financing commitments to close the $6-billion financing gap ahead of the Board meeting.

Pakistan did not feature on the IMF Executive Board calendar as of Thursday morning.

Perez Ruiz had earlier already stated that there was only time for one last IMF board review before the scheduled end of the $6.5-billion Extended Fund Facility (EFF). Many analysts saw this as the IMF’s way of saying that Pakistan would only see a part of the remaining $2.5 billion awaited in disbursement.



seriously what is wrong with tax amnesty if it broadens the tax base ?
 
How long do you think the perks will last for the junta in the current circumstances?
Indefinitely, colonial masters won't allow a default. Will keep this God forsaken country on life support.
 

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