The government has finally reached a staff-level agreement with the International Monetary Fund on the $7 billion expansion fund facility loan program. This is written on the wall that
When the current finance minister came in he made many claims of austerity but when the federal budget’s figures came out it was found that the government’s royal expenditure has increased instead of decreasing, then the process of going to the IMF program was also accelerated while now the government has succeeded in imposing another punishment on the common citizens.
The agreement with the IMF is subject to timely confirmation of necessary financial assurances from Pakistan’s development and bilateral partners. It may be recalled that the IMF has also expressed concern over the tax incentives given to Special Economic Zones and the guarantee of profits on projects implemented under the supervision of the military-led Special Investment Facilitation Council.
According to the announcement, IMF and Pakistan authorities will phase out concessions for Special Economic Zones under the terms of the IMF. Agricultural support prices and related subsidies will also be eliminated and new regulatory or tax-based incentives and any guaranteed returns that could distort the investment landscape will be avoided.
Projects run through special investments and incentives given to projects by the SIFC (Special Investment Facilitation Council) will be avoided.
The announcement said that the province will waive agricultural income tax and sales tax on services. All provinces will bring full harmonization of the agricultural income tax regime with the federal personal and corporate tax regime through legislative changes and will be effective from January 1, 2025. The net income will be brought into the tax system. The Finance Minister Muhammad Aurangzeb while talking about this said that our discussions with the provincial governments on financial agreements are ongoing and the provinces have helped us to make staff level agreements, external financing.
As the requirements are being determined in consultation with the Fund, we will jointly make progress on this front with the support of the Fund and our bilateral and multilateral lenders.
After achieving economic stability, the new program will further improve macroeconomic stability in the country, support robust and inclusive growth, along with strengthening of fiscal and monetary policy, reforms to expand the tax base, management of state-owned enterprises.
Ii said that measures will be taken to increase social security through improvement, competitiveness and opportunities for investment. Continuity of financial support to Pakistan from Pakistan’s development and bilateral partners will be critical to achieving the objectives of the new program.
The statement said that at the request of Pakistan, the IMF team led by Mission Chief Nathan Porter to Pakistan. He visited Islamabad from May 13 to 23 and held talks, while after that, the medium-term policy and reform plan were reviewed by the Pakistani authorities in virtual talks, after which the federal and provincial governments of Pakistan ratified it. A 37-month extension fund arrangement agreement of 7, billion dollars has been reached between MF and Pakistan.
The money of that huge debt will now be taken from the public and as a result of that will be a huge increase in the number of taxis. During this month, not only petrol will be more expensive but people will also have to buy more expensive electricity and gas. Due to that the livelihood of common citizens will be damage more, the main reason is that pulses and vegetable are not available on cheap rates for a layman after the local agriculture has been devastated.
The curse debt that impose on the masses through the rulers is now out of reach of the people.
On the other hand, ordinary citizens are suffering from hunger and poverty. In terms of food shortage Pakistan has been compared with countries like Congo while the Thar (Sindh) area has been declared the most famine-stricken region in the world but it has not been any reduction in privileges of ruling class. In this year’s budget the heads of state have approved additional expenses for all the elites, including Parliament and the Prime Minister’s House. In this situation only a miracle can save the nation from the storm of inflation.so it is the foremost duty of the entire government to think about the socioeconomic future of the country.
