Pakistan government will not seek IMF bailout package: Sources

Pakistan government will not seek IMF bailout package: Sources

ISLAMABAD - Pakistan government would not seek IMF bailout package rather will try to cover the budget deficit and the financial crunch through strict domestic policy.

The deficiency would be further covered with grants and loans from friendly countries including China and Saudi Arabia.

Pakistan’s economic managers have reportedly informed IMF .

Finance officials on Thursday briefed the IMF team from Washington, DC, on video conference.

Proposed mini-budget and partial withdrawal of tax incentives, imposition of regulatory duties on luxury items and slashing down development outlay in the range of Rs330 to Rs430 billion were reported.

The IMF team was briefed by Pakistani authorities that the government planned to take additional taxation measures of Rs100 to Rs125 billion through proposed changes in the Finance Act 2018 and imposition of additional customs duty as well as slapping increased regulatory duty on import of luxury items.

Some income tax exemptions might be withdrawn but so far no final decision was made on it. The FBR’s tax collection target would also be revised downward from Rs4,435 billion to Rs4,300 billion-4,325 billion for the current fiscal year 2018-19 against the collection of Rs3,842 billion for the last fiscal year 2017-18.

The FBR has convinced the Finance Ministry that the envisaged target of Rs4,435 billion was based on the projection of last year collection at Rs3,935 billion but the actual collection stood at just Rs3,842 billion so the tax machinery argued that without taking additional taxation measures it could collect Rs4,200 billion maximum.

Pakistani team led by Minister for Finance Asad Umar, Minister for State for Revenues Hammad Azhar and others also apprised the IMF team on video conference at 6.30 pm on Thursday at Finance Ministry that the budget would be made on realistic assumption and overall revenue collection targets and expenditures adjustments would be made to bring down the budget deficit at sustainable levels. In last fiscal year ended on June 30, 2018 the budget deficit had peaked to Rs2260 billion equivalent to 6.6 percent of GDP.

The IMF 's staff team is scheduled to visit Islamabad from September 27 for holding one week talks but the Pakistani managers decided to brief the IMF through video conference for proposed budgetary measures in advance.