IMF-Pakistan policy talks begin as tough economic measures loom

Pakistan and the International Monetary Fund (IMF) have commenced policy-level discussions on the next tranche of the $7 billion loan program, with the review set to continue until March 14.

According to officials from the Ministry of Finance, the IMF delegation will assess the country’s progress in implementing economic reforms under the program’s conditions.

The discussions will also include consultations on budget proposals for the upcoming fiscal year, with a particular focus on taxation and energy sector reforms.

Proposed taxation measures

Sources indicate that the IMF has put forth several taxation measures, including a Rs 2.80 per unit surcharge on electricity bills and the imposition of carbon tax on petrol and diesel.

In an alternative proposal, the Fund has suggested increasing the petroleum levy from Rs 60 to Rs 70 per litre. Additionally, a carbon levy on coal-fired power plants and industrial boilers is under consideration.