ISLAMABAD: Pakistan and the International Monetary Fund (IMF) are currently in intense negotiations in Islamabad as they work to resolve a significant financial shortfall of Rs. 605 billion. The Pakistani government has abandoned plans for a mini-budget for FY 2024-25, opting instead for an alternative strategy to meet its financial obligations.
Sources reveal that the government is focusing on resolving tax-related cases pending in various courts as part of this new plan. Prime Minister Shehbaz Sharif has pledged full cooperation, and the Chief Justice of Pakistan, Yahya Afridi, has approved an expedited hearing for these cases. A key development is a crucial hearing scheduled in the Supreme Court on March 10, which could determine whether the Federal Board of Revenue (FBR) can recover a substantial amount of Rs. 157 billion.
The IMF has been briefed on the situation, and discussions have also been held regarding the operationalization of the Bank Resolution Framework to improve the banking sector. Furthermore, the IMF delegation, led by Nathan Porter, has stressed the urgency of closing the revenue shortfall in the next fiscal quarter. They emphasized that there is “no room for revenue shortfall” in Pakistan’s efforts to unlock a $1 billion tranche from the $7 billion loan program.
In addition to tax reforms, discussions have focused on Islamic banking reforms, refinance schemes, and the transition of development finance. The outcome of the Supreme Court’s upcoming hearing could have a significant impact on Pakistan’s ability to meet its financial targets and satisfy the IMF’s requirements for continued financial assistance.
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