Pakistan’s negotiations with the International Monetary Fund (IMF) for the next $1billion tranche of its $7billion loan programme began Monday.

The finance ministry said official talks between the IMF mission and the Pakistani government team were set to last for two weeks as Pakistan had already met most of the IMF’s strict conditions.

The country will assure the IMF that the tax target for the current fiscal half-year will be achieved. The government will also request flexibility on two fronts: the unmet target of the trader-friendly scheme and the delay in legislation on agricultural tax by the provinces.

Under the leadership of IMF mission chief Nathan Porter, the discussions will initially take place at a technical level before moving to policy-level negotiations.

The talks will evaluate Pakistan’s economic performance from July to December 2024. A successful review would unlock the next $1billion tranche.

According to the Ministry of Finance, Pakistan has met the IMF’s major conditions. The provinces provided a surplus budget of Rs776billion against a target of Rs750billion . Provincial revenue amounted to Rs442.4billion , exceeding the target of Rs376billion rupees.

However, the Federal Board of Revenue (FBR) has not met its tax collection goal for the first half of the fiscal year, collecting Rs5.624trillion instead of the Rs6.008trillion target, resulting in a shortfall of Rs384billion.

The government is expected to assure the IMF mission that the target will be achieved in the second half of the year.

During the talks, the Pakistani team will also request leniency from the IMF regarding the unmet tax target of the trader-friendly scheme and the delay in provincial legislation on agricultural income tax.