ISLAMABAD: The policy negotiations between Pakistan and the International Monetary Fund (IMF) commenced today to finalize the budget for the upcoming fiscal year 2025-2026.
The discussions are expected to continue until May 23, focusing on revenue targets, expenditure controls, and debt sustainability.
IMF officials are demanding that Pakistan’s total revenue for the next fiscal year reach 20 trillion rupees, a significant increase from this year’s approximately 17.8 trillion rupees. Sources indicate that the IMF is emphasizing strict controls on non-development expenditures to ensure fiscal discipline and reduce spending.
During the negotiations, Pakistan will propose several measures aimed at easing the tax burden on various sectors.
These include abolishing withholding taxes on raw materials for construction industries and property transactions, as well as eliminating federal excise duty on property buying and selling. Additionally, Pakistan plans to request the removal of the super tax and has assured the IMF of efforts to increase the tax-to-GDP ratio to 11%.
Pakistan also faces the challenge of repaying approximately $1.9 billion in loans during the next fiscal year. Officials stressed the importance of sustainable debt repayment strategies as part of the ongoing discussions.
To support the salaried class, Pakistan will put forward various proposals to provide relief and ease the financial burden. The government aims to strike a balance between revenue enhancement and social welfare, ensuring economic stability in the face of fiscal constraints.
The outcome of these negotiations is crucial for Pakistan’s economic stability and development plans for the upcoming year. Both sides are optimistic about reaching mutually agreeable terms to foster sustainable growth.
