Finance Minister Muhammad Aurangzeb on Thursday reiterated his hopes for the government securing a new bailout from the International Monetary Fund (IMF) within this month, stressing that all prior actions had been fulfilled.
Speaking with media after briefing an in-camera meeting of the National Assembly’s Standing Committee on Finance and Revenue about negotiations with the IMF, he said the government also planned to request the lender to augment any potential package with a climate resilience facility. He said he hoped the size of the Extended Fund Facility would surpass $6 billion but admitted this had not yet been finalized.
According to Aurangzeb, climate financing was not discussed during negotiations with the IMF. However, he confirmed that provinces had agreed “in principle” to impose income tax on the agricultural sector.
During the parliamentary briefing, per sources, the minister acknowledged that inflation would increase after the new budget, but claimed it would be within limits allowing the State Bank of Pakistan to reduce the interest rate. Maintaining that macroeconomic indicators had improved in recent months, he claimed securing the IMF deal would unlock additional financing from other multilaterals.
“Nothing is being controlled artificially, there is no restriction on imports and all assumptions about devaluation have died down,” he stressed, rebutting allegations of the government manipulating the exchange rate.
The minister lamented that various sectors were attempting to get taxes imposed on them reversed as they did not want to enter the tax net. He also defended the tax on exporters by claiming the IMF wanted to eliminate presumptive tax. “Exporters are worried, but we also have our own compulsions,” he said, stressing that tax refunds for exporters would continue, as over Rs. 260 billion had already been cleared.
To a question, Aurangzeb said the government planned to abolish five ministries within this fiscal year.