Fate Of 7th $6 Billion EFF Review will Depend On Budget Composition

IMF Pakistan

ISLAMABAD: The fate of the seventh $6 billion Extended Fund Facility (EFF) review will depend on the composition of budget scheduled to be laid before parliament on 10 June with targets set that would indicate the government’s expenditure and revenue priorities for next fiscal year.

This was revealed by several senior officials of the Ministry of Finance on condition of strict anonymity. However, one official claimed that technical level talks on the budget proposals will commence from Tuesday (today).

Officials further contended that the Doha talks had been inconclusive with respect to projected expenditure for next fiscal year, particularly with respect to subsidies, though the Fund was reportedly satisfied with the Federal Board of Revenue’s (FBR’s) targets and presentation, including the levy of personal income tax and phasing out exemptions next year.

However, the FBR targets do not include petroleum levy (PL), budgeted at Rs 610 billion for 2021-22 (though less than half was realized) nor gas infrastructure development cess budgeted at Rs 130 billion, which is itemised under non-tax revenue receipts.

Background interaction with officials further revealed that primary deficit, budget deficit, a strategic plan for withdrawal of energy subsidies and a provincial surplus agreed and signed by provinces are major areas of interest to the Fund that could bring the programme back on track.