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Executives Observe Advancement In Discussion With IMF

Jul 18th 2010 at 2:28 AM

The much predictable gathering between the Pakistani and IMF executives was held here on Saturday and despite the depressing prediction of many observers it is said to have gone healthy. The Pakistani executives who attended the meeting are positive that they have been talented to convince the IMF squad about the government’s sincerity in meeting the targets agreed upon with the donor agency, ensuring that the world body would release the next aids on time. Finance Minister Dr Abdul Hafeez Sheikh and the IMF squad by Executive Director Dr Jaffar Mojarrad led the Pakistani side. The Pakistani representatives briefed the IMF team on the state of country’s economy and the development made by the government on the economic reforms being taken under the Standby Arrangement. The prickly issue talked about at the meeting was Pakistan’s collapse, so far, to implement the GST. The IMF’s foremost demand is that the government increases its tax base and improves its revenue collection. The tax has been overdue because of opposition from provinces. According to the Pakistani representatives, the IMF delegation had been guaranteed that government’s discussions with provinces on the execution of reformed GST/VAT would give up optimistic results by the end of this month. They said the team had been guaranteed that the key economic reforms, including implementation of reformed GST to augment revenue generation was on pathway; and discussion were in progress with provinces to settle all borderline issues. The government has decided to execute the reformed GST so that it can replace the proposed VAT mode from the second quarter of current fiscal year, which begins in October. Though, the government’s pledges were not enough to make happy the skeptical IMF squad because the fund does not have much faith in Pakistan’s ability to attach to its economic objectives. The IMF squad spoken anxiety over the high percentage of differential between electricity being provided to consumers and payment being received against it as well as electricity losses due to poor distribution structure. The IMF delegates pointed out that the national electricity sector recovered only 67 per cent of the bills generated while the average line loss was around 20 per cent. In their opinion, the power sector witnessed losses of more than 50 per cent.

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