Pakistan plans to discuss loan extension program with IMF

Islamabad: Finance Minister Muhammad Aurangzeb said that there is a plan to discuss the loan extension program with International Monetary Fund (IMF), however, first tax should be collected from the sectors not included in the tax net and the privatization agenda should be implemented.

Speaking at the Atlantic Council in Washington, Finance Minister Muhammad Aurangzeb stated that structural reforms will take two to three years.

He added: “The inflation rate in Pakistan has come down from a high level of 38 percent to around 20 percent and the overall Gross Domestic Product (GDP) is growing in a positive direction”.

The finance minister continued to say that the growth in agriculture GDP is 5%, the services sector is on the way to improvement, the exchange rate is stable and the government will push forward the reform agenda.

Muhammad Aurangzeb further said that the experience in the private sector will be used for economic stability, tax to GDP is insufficient at 10%, it has to be taken up to 15%, investment to GDP must also be taken up to 15%.

The finance minister also stated, ‘We will have to increase exports, bring the circular debt in order, implement the privatization agenda, all these issues have been signed by my predecessors in the agreement with the IMF’.

The digitization is necessary for transparency in the tax system, it is also necessary to collect taxes from those sectors which were not included in the tax net earlier, added Aurangzeb.

He continued that while trying to bring more people into the tax net, we have to reduce expenditure.

Muhammad Aurangzeb said that talks with the IMF officials on his arrival in Pakistan were constructive, the economic situation of Pakistan has improved this year, Pakistan has successfully completed the IMF program, there have been positive discussions with the IMF officials.

He added that steps are being taken to increase tax collection, reforms are being brought in Federal Bureau of Revenue (FBR) and economic stability can be brought through public-private projects.

“We have to restore one-window operation, the process of consultation with all stakeholders is going on, the cooperation of international organizations is indispensable for comprehensive development, we have to create a favorable environment for domestic and foreign investors,” stated the federal minister.