Dar explains what actually led to changes in budget

ISLAMABAD: Finance Minister Ishaq Dar has stated that changes— imposition of additional taxes of Rs215 billion and a Rs85 billion cut in expenditure in 2023-24—in the federal budget presented on June 9 were made after a discussion with the International Monetary Fund (IMF).

While briefing the National Assembly Standing Committee on Finance on Friday, the minister stated that when the budget was presented it was stated that no new tax would be imposed.

However, he added that for securing an agreement with the IMF, the government had to impose new taxes.

“We had to make changes in the winding-up speech in view of the conditions of the IMF. Some concessions granted on June 9 were taken back in the amended Finance Bill 2023,” he said.

Pakistan will look to impose Rs215bn additional taxes after IMF talks: Dar

Under the IMF programme, giving tax exemptions or preferential tax treatments or amnesty scheme is banned. “ It is banned to grant any new tax exemption till we are in the IMF programme,“ Dar said.

He said that the previous government withdrew from its commitment with regard to the points of agreement with the IMF due to which Pakistan had not been able to get a loan from any institution, including the IMF.

He said that when he arrived at the end of September, the IMF was requested to visit for the review in November but the arrival of the IMF staff mission was delayed and they came on January 31. The staff-level agreement could not be reached in time, which created problems.

The finance minister added that the coalition government combined the seventh and eighth reviews but external financing issues led to a delay in the completion of the review. He said that Pakistan had a Plan-B and the country would not have defaulted even without the IMF.

If they were not in the IMF programme, the government would not have imposed new taxes in the budget, he said.

The meeting was told that the IMF agreement is available on the website of the Ministry of Finance. The Minister of Finance said that it is written in the IMF document that Pakistan will not give any kind of tax amnesty.

The finance minister said that the government successfully persuaded the IMF to agree to the deal. He added that the prices of petroleum products have been increased to complete the 7th and 8th reviews of the IMF. This is Pakistan’s 23rd programme with the IMF. Tehreek-e-Insaf took the 22nd programme from IMF but it did violate the agreed terms and conditions, he added.

Copyright Business Recorder, 2023