The International Monetary Fund (IMF) has called on Pakistan to come to talk and renegotiate the loan programme, if it intends to get the requested three weeks extension to implement prior committed actions.
The IMF’s latest demands come in the wake of a request by Pakistan to get a three weeks extension in the process of implementing prior actions it committed to implementing before the sixth review meeting with the global lender, scheduled for Wednesday.
However, the demands have not been accepted by Pakistan.
“When I approached them for extension, they asked to renegotiate the programme,” said Finance Minister Shaukat Tarin during a meeting of the Senate Committee on Finance where the reading of the Finance Supplementary Bill 2021 was being discussed.
During the meeting, Tarin briefed the committee about 375 billion PKR worth of new taxes as per the condition agreed during last negotiation with the IMF.
The Minister also stated that he did not agree to renegotiations with the IMF amid fear that the IMF may impose new conditions.
However, Tarin was able to convince the IMF to allow a three-week extension, extending the sixth review of the programme from January 12 to 28 for taking Pakistan’s case to its board.
“The final date will be conveyed to us soon,” stated Tarin.
While the three-week extension may come as a much-needed breather for the Imran Khan-led government, it signifies that IMF is not ready to give much time to Islamabad to implement all prior committed actions, which includes the imposition of fresh taxes and increasing the tax base.
It also pushes the federal government to ensure approval of the SBP Amendment Bill 2021 from Parliament and the Senate before the mentioned dates, a challenge that may be taken as an opportunity by the opposition benches to damage the ruling government.
As per Article 70 (3) of the constitution of Pakistan, any house (upper and lower) has at least 90 days to approve a bill from the date it is proposed. And as per the process, The National Assembly Standing Committee on Finance approved the SBP Amendment Bill 2021 and extended it ahead to the National Assembly for approval.
After approval from the National Assembly, where the bill currently stands pending, it will be extended to the upper house (Senate) for approval.
Both houses have 90 days to approve the bill, as per the Constitution, which makes at least six months for both houses to approve the bill and bring it into effect.
But with only three weeks of extension available, delays in approval from both houses will create a serious challenge for the government.
This comes as the Senate is already seeking the removal of Ernesto Rigo, the IMF Mission Chief to Pakistan.
The sixth review of Pakistan’s IMF programme has been pending approval since June last year due to the delays in implementing the strict conditions imposed by the Fund.
With debate underway about various clauses of the Amendment Bill, the government is struggling to get approval from the standing committee, which comprises representatives of all political parties.
The government has maintained that it is pivotal to impose taxes on various sectors, items and segments to increase the country’s tax base and fulfill the IMF conditions.
But the opposition benches argue that the swelling inflation in the country has already made life impossible for the locals, adding that new taxes would only bring more miseries to the people.