Government's action required by IMF
Tuesday, February 3, 2009
Measures, Government of Pakistan's actions required by IMF in the memorandum of economic and financial policies with timelines are as follows;Fiscal consolidation during FY 09:
Borrowing from SBP:
- SBP finance of the budge will be reduced to Rs.165.00 billion on a cumulative basis (In FY09)
Increase tax revenue:
- An integrated tax administration organization on a functional basis will be established at the federal Board Revenue (FBR) (During rest of FY09)
- Audits will be re introduced as part of a risk-based audit strategy (By End – Dec,2008)
- A full description of the required reforms, together with an action plan will be provided to the IMF, following a planned seminar to review tax policy and administration (By End – Dec,2008)
- Preparation of draft legislation for the VAT for public debate (By End-2009)
- Harmonize the income tax and GST laws, increase excises on tobacco, and reduce exemptions (FY10 budget)
Spending for social safety net:
- An increase in social safety net spending from budgeted 0.6 percentage points of GDP to 0.9 percent of GDP (During FY09)
- In close cooperation with the World Bank, preparation of a strategy and a time-bound action plan to put in place a comprehensive and well-targeted social safety net (By End – Mar, 2009)
Single treasury account:
- Existing funds held outside the SBP account will be transferred to the SBP account (By End – Dec, 2009)
Circular debt:
- Preparation of a plan for eliminating the inter – corporate circular dept within the fiscal deficit target (By End – Mar,2009)
Electricity tariff adjustment:
- Electricity tariff differential subsidies will be fully eliminated. In this regard, the average base tariff will be further increased during FY09 according to a schedule to be agreed with the world Bank (By End-Dec,2009)
Fuel price adjustment:
- Moreover, fuel prices will continue to be adjusted to pass through changes in international prices. (Continuous)
FY10 fiscal deficit:
- A further reduction in the fiscal deficit to 3.3 percent of GDP I s envisaged for 2009/10 (During 2009)
Fiscal consolidation in medium term:
- Reduction in the fiscal deficit to 2-2.50 percent of GDP (by FY2013)
- Increasing tax revenue by at least 3.50 percentage points of GDP (by FY2013)
Ref: Monetary policy statement Jan-Mar, 2009 (SBP)
Labels: Economy and Business, Pakistan Economy
posted @ 5:44 PM,
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