ISLAMABAD: Negotiations between Pakistan and the International Monetary Fund (IMF) on the budget estimates and targets for the next fiscal year 2025-26 have been completed, but the budget targets could not be agreed upon, as a result of which the date of budget presentation by the federal government has been changed and now the federal budget will be presented on June 10 instead of June 2.
A spokesperson for the Ministry of Finance has confirmed that the federal budget will be presented in the National Assembly on June 10, while sources said that there is a delay in completing the basic budget preparation for presenting the budget on June 10 because consultations with the IMF have not been completed yet.
May 22 was the last day of negotiations with the IMF, however, the IMF Director for the Middle East and Central Asia, Jihad Azhoor, who is on a visit to Pakistan, along with a delegation, held important meetings with Finance Minister Muhammad Aurangzeb, Prime Minister Shehbaz Sharif and President Asif Ali Zardari and also expressed satisfaction with Pakistan’s economic performance.
Sources said that the delegation also met Finance Minister Muhammad Aurangzeb on Friday and it is expected that an official statement about the talks will be issued by the IMF soon.
Sources said that the statement will clarify the progress made in the talks and whether targets will be set in the virtual talks.
Sources said that the budget estimates have not yet been agreed with the IMF, which is why the budget will now be presented on June 10, while the economic survey will be presented on June 9.
Sources said that the budget talks with the IMF have not been finalized, the Prime Minister has immediately summoned the economic team and issued instructions in this regard.
Sources in the Ministry of Finance say that more time is needed to set budget targets with the IMF, while negotiations have been completed during the IMF mission’s visit to Pakistan. The targets for the next fiscal year can be set in virtual negotiations and the budget draft will be finalized after the completion of consultations with the IMF. The PSDP and the annual development plan are yet to be approved.
It should be noted that the date for presenting the federal budget was earlier set for June 2. According to sources, no consensus could be reached with the IMF on the budget targets and now the negotiations on the budget with the IMF will continue next week.
According to sources in the Ministry of Finance, the government has also shared proposals related to reducing tax rates on the salaried class and industries and increasing the defense budget more, reducing development and non-development expenditures.
Sources said that the government has given suggestions to reduce the tax burden on the salaried class, has also proposed to reduce the cost of doing business by reducing the tax rate on the industrial sector, and has also informed the IMF about the details of increasing tax and non-tax revenues.
In the negotiations between Pakistan and the IMF, the framework for collecting agricultural income tax for the next financial year was also considered, Pakistan has also put forward a plan to increase the income of the provinces before the IMF.
Sources said that the IMF is emphasizing that if the salaried class has to be given tax relief or taxes on industrial raw materials have to be reduced, then an alternative plan will have to be given for this and government expenses will have to be reduced.
