The annual meetings of the International Monetary Fund (IMF) and the World Bank will commence in Washington on Monday (today). Headed by Finance Minister Muhammad Aurangzeb, a delegation from Pakistan will participate in these meetings, scheduled from April 17 to 19.
Finance Minister Aurangzeb is slated to meet with key figures, including the managing director of the IMF and the president of the World Bank, as well as other financial institutions and US officials.
Sources in the Ministry of Finance revealed that a formal request for a new loan program with the IMF will be submitted during the visit. Formal negotiations on the new loan program will be held during the IMF mission's visit to Pakistan, the sources said.
The proposed program, which is still in the preliminary stages of development, is expected to address Pakistan's financial needs and priorities. The size and duration of the loan program are yet to be finalized, but it could range from three years or more and amount to approximately $6 to $8 billion.
Revenue Enhancement Measures
In addition to seeking financial assistance, the government is focusing on revenue enhancement measures. Plans include reforms in the Federal Board of Revenue (FBR) and broadening the tax net from sectors such as real estate and agriculture.
Efforts are underway to bring in more taxpayers and invest in technology to improve tax administration, including bringing about 3.1 retailers into the tax net, as per the sources. A plan has been made to increase the number of tax filers and subsequently revenue.
The sources further said that efforts were underway to bring 1.5 to two million new taxpayers into the tax net as well as widen the tax net and increase the tax-to-GDP ratio. Efforts will also be made to expand the tax net through investment in technology, the sources said.
Focus on Energy Sector Reforms
The government is also working on reforms in the energy sector to ensure affordable and sustainable energy solutions. Investments in local resources and the upgrading of local oil refineries are part of the priorities to reduce dependence on imports and increase production capacity.
The upgrading of local refineries is expected to bring in an investment of $6.5 billion, sources said.
Additionally, improvements in the electricity distribution and transmission system are on the agenda to enhance efficiency and reduce losses. The plan also includes not letting the energy sector circular debt increase further. Moreover, electricity distribution companies will be handed over to the private sector and loss-making state-owned enterprises privatised, the sources added.
Two Requests for IMF Support
During the meetings, the finance minister is scheduled to present two requests to the IMF. One will be for an Extended Fund Facility, while the other will seek additional funding for climate financing.
A briefing on measures to address climate change has also been prepared for IMF officials, emphasizing Pakistan's commitment to environmental sustainability.
The State Bank governor and the finance secretary will apprise the IMF officials of the economic figures. In case of positive talks with the IMF MD, a Fund mission will reach Pakistan next month, the sources disclosed.
