ISLAMABAD – Pakistan government would not seek IMF bailout package ratherwill try to cover the budget deficit and the financial crunch throughstrict domestic policy.

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

Pakistan’s economic managers have reportedly informed IMF.

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

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

The IMF team was briefed by Pakistani authorities that the governmentplanned to take additional taxation measures of Rs100 to Rs125 billionthrough proposed changes in the Finance Act 2018 and imposition ofadditional customs duty as well as slapping increased regulatory duty onimport of luxury items.

Some income tax exemptions might be withdrawn but so far no final decisionwas made on it.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

The FBR has convinced the Finance Ministry that the envisaged target ofRs4,435 billion was based on the projection of last year collection atRs3,935 billion but the actual collection stood at just Rs3,842 billion sothe tax machinery argued that without taking additional taxation measuresit could collect Rs4,200 billion maximum.

Pakistani team led by Minister for Finance Asad Umar, Minister for Statefor Revenues Hammad Azhar and others also apprised the IMF team on videoconference at 6.30 pm on Thursday at Finance Ministry that the budget wouldbe made on realistic assumption and overall revenue collection targets andexpenditures adjustments would be made to bring down the budget deficit atsustainable levels. In last fiscal year ended on June 30, 2018 the budgetdeficit 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 forholding one week talks but the Pakistani managers decided to brief the IMFthrough video conference for proposed budgetary measures in advance.