IMF mission: government team likely to face tough time

A two-day policy-level talks between International Monetary Fund (IMF) and Pakistani authorities under the first quarterly review of Extended Fund Facility (EFF) would begin from Tuesday and country''s economic managers may face tough time on the issue of subsidies and a reported shortfall in revenue collection.
Sources said that a reported shortfall in the revenue collection by the Federal Board of Revenue (FBR) during the first quarter of the current fiscal year and implementation of tariff increase from October 1, 2013 may be some of the major concerns of the visiting IMF delegation during the policy-level talks. An official on condition of anonymity said the government was confident that it would come out victorious in court case and be able to implement power tariff increase retrospectively from October 1, 2013 to recover an additional subsidy of around Rs 20 billion on account of non-implementation of power tariff.
Sources further stated that another area of concern for the IMF delegation may be the enforcement capacity of FBR on failure to bring agreed potential persons into the tax net to broaden the tax base. The issue of timely serving of notices upon the declared addresses of the potential persons may also be discussed. An official of Finance Ministry claimed that everything remained smooth during the technical-level talks and the IMF delegation was satisfied over the implementation of agreed reforms for the first quarter. He added that the lending agency was explained the factors responsible for the revenue shortfall of Rs 32 billion during the first quarter and was informed that 32,000 notices were issued to potential persons, but also acknowledged that many notices could not be served due to change of addresses and some 10,000-12,000 remained un-served due to poor performance of the courier company engaged for the purpose.
The IMF delegation is in Pakistan to conduct first quarterly review of reforms under the EFF. It held meetings with officials of Finance Ministry, State Bank of Pakistan, Economic Affairs Division (EAD), and others for technical level talks. The representatives of Finance Ministry and SBP as well as other ministries have briefed the IMF visiting mission about the implementation of the agreed reforms. The IMF staff-level mission would remain in Pakistan till November 7 to conduct the first quarterly review of EFF which would enable them to release the next instalment.