FinMin optimistic about completion of IMF’s Extended Fund Programme

Islamabad: Finance Minister Muhammad Aurangzeb expressed strong optimism on Sunday about Pakistan securing a new bailout from the International Monetary Fund (IMF), following President Asif Ali Zardari's approval of a tax-heavy budget for the upcoming fiscal year starting July 1.

“The IMF programme guarantees our macroeconomic stability. Advancing it is inevitable. I am very optimistic that we will successfully complete the Extended Fund Programme, which will be larger and more extended,” Aurangzeb  while talking to the reporters in Islamabad on Sunday.

Addressing concerns about the impact on inflation-stricken citizens, Aurangzeb said, “I fully understand the stress additional taxes place on people from various sectors; I empathize and sympathize with them, but we need to proceed with these measures,”.

The finance minister emphasized his determination to reduce the burden on ordinary citizens and businesses in the coming days by improving the management system and curbing financial leakages.

The financially challenged federal government implemented an Rs18.9 trillion budget featuring various tax-raising measures in an effort to secure the IMF bailout, narrowly avoiding default last year.

The new budget increases taxes on the already burdened salaried class, integrates exporters into the normal tax regime, raises the petroleum levy to Rs70, and introduces new taxes on the real estate sector, among other measures, to boost tax revenue.

The experts believe that while the financial plan will help the struggling nation secure the IMF deal, they also warn that it might lead to increased inflation, potentially causing public discontent.