The government would impose a Rs. 170 billion “mini-budget” for the IMF deal.

Pakistan has received a Memorandum of Economic and Fiscal Policies (MEFP) and a Letter of Intent from the International Monetary Fund, according to Finance Minister Ishaq Dar (IMF). Additionally, he promised 170 billion rupees in extra taxes to finish the lender’s programme and collect nearly $1.1 billion in the rescue.
Dar briefed the media earlier today on the 170 billion rupees in fiscal taxes and energy sector reforms and said that the government was prioritising the reduction of untargeted subsidies while imposing enormous taxes.

Dar said that the ten-day negotiations included the electricity and petrol industries, as well as fiscal and monetary considerations. He said that Prime Minister Shehbaz Sharif had personally informed the IMF that all requirements will be met.

Priority Sectors Are Taxed More Heavily
Next month, the government will impose a Rs. 10 per litre fuel fee on diesel. Dar said that the IMF’s proposal to impose a sales tax on gasoline “was not accepted.”

The cost of power, which is now estimated at 300 billion rupees but only receives 1,800 billion rupees, is one of the most important problems facing the economy. Dar emphasised that severe energy sector reforms would be implemented to limit the expansion of circular debt in the power and gas sectors and to reestablish the IMF lending facility.

Forex Reserves and Mutual Assistance
Dar said that all past obligations would be met, and Pakistan will get a new stream of foreign inflows from bilateral and multilateral nations, which will assist in bolstering its foreign exchange reserves. “Friendly nations will likewise honour their commitments,” he continued.

Dar indicated that the first round of post-MEFP virtual discussions would take place on Monday. In addition, he highlighted that Staff Level Agreement would take a few days to complete due to the need to adhere to certain regulations.