President DrArifAlvi on Tuesday turned down the federal government’s request to approve an ordinance, seeking to imposing new taxes to raise additional revenue in line with the conditions of International Monetary Fund (IMF) to revive the stalled $6.5 billion bailout package.
According to an official statement issued by the President House, Finance Minister Ishaq Dar called on the president and apprised him of the progress in talks with the IMF and all modalities that had been agreed upon.
Alvi appreciated the efforts of the government for negotiating an agreement with the International Monetary Fund and assured that the state of Pakistan would stand by the government’s commitments in this regard, it added.
The minister informed that the government wanted to raise additional revenue through taxes by promulgating an ordinance.However, the president advised that it would be more appropriate to take the parliament into confidence on this important subject, and that a session be called immediately so that the bill was enacted without delay.
Pakistan is battling an economic crisis which has seen inflation rocket up and forex reserves dwindle to critical levels. Last week, the central bank said its reserves had dropped to $2.9 billion, enough to cover less than three weeks of imports.
The country desperately needs the International Monetary Fund (IMF) to finalise the ninth review of the loan programme it entered with the global lender in 2019, paving the way for the release of a $1.2 billion tranche that will also unlock inflows from other bilateral and multilateral sources.
But an agreement with the IMF has been pending since October last year as the two sides have not been able to reach a consensus in talks that have largely centred around an economic reforms agenda focusing on the energy sector and exchange rate liberalisation.
The government has so far met two prior actions of increasing the electricity and gas prices, which were set by the IMF along with other conditions, for reaching a staff-level agreement. Meanwhile, PTI Vice President Fawad Chaudhry said no new taxes could be levied without the parliament’s approval.
