The purpose of the meeting was to provide a chance to both sides to have perspective of each other on overall economic condition of the country. The IMF staff-level review mission, which is in Pakistan for the first review of the $6 billion program, also held meetings with independent economists and Senate Finance Committee led by Farooq H Naek and National Assembly's Finance Committee led by Asad Umar. The meeting was also attended by the secretary finance and other officials of Finance Ministry but advisor on finance was castigated due to his absence from the joint meeting.
The members of the finance committees claimed to have conveyed their concerns to the IMF team.
Talking to media persons after the meeting, the parliamentarians said that members have conveyed their concerns to the IMF but the review mission remained quiet to their demand that terms and condition of the current program must be reviewed. The parliamentarians also desired the IMF to revise downward Federal Board of Revenue's tax collection target for the current fiscal year as well as swift adjustments of electricity and gas prices, policy rate and exchange rate, which have triggered inflation and unemployment and are having a negative impact on economic prospects.
Asad Umar described the meeting with the IMF as 'good' and expressed his ignorance with regard to establishing Pakistan Revenue Authority for centralized collection of taxes including sales tax of services, and stated that his information in this regard is limited to news reports.
Farooq H Naek said that the IMF has made it clear to the committees that "this is not IMF program; rather it is government of Pakistan's program." He added that the government and not the IMF should be blamed for the economic woes of the country.
The most important part is that the federal government wants to collect sales tax on services through centralized collection of taxes under Pakistan Revenue Authority and warned that it would be violation of the Constitution after the 18th constitutional amendment, he said and added that sales tax on services is provinces' domain after the 18th constitutional amendment and if the IMF presses for centralized collection of taxes or government itself wants to bring sales tax on services under central domain, it would be violation of the Constitution. He said this change would make the provinces dependent on the federal government.
He said that the IMF was also conveyed that increase in interest rates due to IMF conditionalies has decreased private investment as borrowing has become unaffordable for businesses.
Senator Sherry Rehman stated said it seems that discussion in the meeting was taking place about some other place and not Pakistan because the government side was presenting a rosy picture of the economy and was arguing that everything is moving in positive direction.
"The government indicators presented in the meeting were completely opposite to the ground realities and we are accountable to the people of the country and not the IMF," she said, adding that there is massive dearness in the country.
She said that the government's priorities are entirely different and are hurting the people of the country in the present situation. She said the gas prices have been increased by 200 percent and committees are seeking answers from the government and not the IMF. She said that for the first time there is a program without any filter and the government must document the economy but it does not mean that it makes difficult for the citizens to make the both ends meet.
She claimed that the country's debt has crossed 80 percent of the GDP and the government team could not give a satisfactory reply as to how it would reduce the debt in the coming months and years. "We have also raised the issue of exchange rate and if it would be free float, Pak rupee depreciation would continue," she added.