ISLAMABAD: The International Monetary Fund (IMF) has raised serious objections over the budget for fiscal year 2023-24, which has further narrowed the chances of revival of the Extended Fund Facility programme.

The Fund has also objected to the new tax amnesty proposed in the budget while saying that it is against program’s conditionality and governance agenda and creates a damaging precedent.

Responding to Business Recorder Esther Perez Ruiz, Resident Representative of IMF in Pakistan stated that Staff remains engaged to discuss policies to maintain stability.

However, the draft fiscal year 2024 Budget misses an opportunity to broaden the tax base in a more progressive way, and the long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable BISP recipients and development spending.

The new tax amnesty runs against program’s conditionality and governance agenda and creates a damaging precedent. Measures to address the energy sector’s liquidity pressures could be included alongside the broader budget strategy. The IMF team stands ready to work with the government in refining this Budget ahead of its passage.

Copyright Business Recorder, 2023