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Pakistan refuses to accept IMF conditions of price hikes



IMF tax asad economy days

Pakistan has refused to accept demands of an increase in tax rate and electricity prices by the International Monetary Fund (IMF) in the first round of talks for a financial bailout that ended today, Finance Minister Asad Umar said.

Speaking to media after the meeting, Umar said that disagreements with the IMF continue on certain issues, which include an increase in electricity prices by 20-22%.

The Pakistani-led delegation led by Umar also disagreed on increasing tax collection target from Rs4,300 billion to over Rs4,700 billion.

Moreover, the IMF had said that Pakistan needs to devalue rupee against dollar, which Pakistan refused.

Responding to a question regarding sharing details of financial assistance deal done with China, Umar said that Pakistan has nothing to hide from the IMF and that all finances regarding the economic cooperation are transparent.

The IMF delegation is expected to return today, however, Umar said further rounds of talks and a successful outcome are expected before January 15.

Finance Minister Asad Umar on Tuesday held a meeting with the visiting International Monetary Fund (IMF) mission led by Harald Finger in Islamabad.

While expressing concerns over the conditions put forward by IMF for the bailout package, Asad Umar clarified that Pakistan is not ready to accept them.

Sources said that the IMF demanded the government to increase General Sales Tax (GST) to 18 percent and also asked the government to withdraw subsidy in phases.

The mission also demanded the PTI government to increase interest rate more than 1 percent.

It asked the government to make State Bank, Oil and Gas Regulatory Authority (OGRA) and National Electric Power Regulatory Authority (NEPRA) independent.

The fund further demanded the government to crackdown against tax evaders and also asked to slash line losses of the electricity.

On November 3, the government while bowing to the pressure of IMF had decided to withdraw Rs146 billion subsidy on power being given to the domestic consumers.

Sources told media that the government directed the distribution companies to chalk out a uniform power tariff for domestic consumers of different categories.

A petition seeking the determination of power tariff has also been sent to the National Electric Power Regulatory Authority (NEPRA).

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