Finance Minister meets IMF officials, agrees to end subsidy on petroleum products

Pakistan new Finance Minister Muftah Ismail has agreed with the IMF recommendations to reduce fuel subsidies and end the business tax amnest...

Pakistan new Finance Minister Muftah Ismail has agreed with the IMF recommendations to reduce fuel subsidies and end the business tax amnesty scheme and pledge to implement structural reforms to boost the crisis-stricken economy. What is it.

Finance Minister Muftah Ismail says there have been "good talks" with the IMF - File Photo: Reuters

The International Monetary Fund (IMF) approved a 6 6 billion loan to Pakistan in 2019 over a three-year period, but repaid due to concerns over the pace of reforms, AFP reported. Suffers from slowness

 

Read more: Finance Minister awaits early agreement on 7th review with IMF

Finance Minister Muftah Ismail said he had "good talks" with the IMF during his spring meeting.

"The IMF has talked about ending fuel subsidies, I agree with them," Muftah Ismail told the Atlantic Council.

"We can't afford the subsidies we're giving at the moment, so we have to reduce it," he said.

He said that former Prime Minister Imran Khan, in an attempt to avoid ouster, had laid a "trap" for the incoming government through heavy subsidies on fuel and electricity as well as a tax amnesty scheme for business.

Read also: Muftah Ismail leaves for US to meet with IMF officials

The finance minister told reporters at a function hosted by the Pakistani embassy that Imran Khan had given amnesty to businesses for setting up factories so that they would not have to pay taxes or if they evaded taxes, they would be repaired.

However, he said that in this skyrocketing inflation, some targeted subsidies should be maintained for the poorest people of Pakistan.

New Prime Minister Shahbaz Sharif has vowed to move the economy forward, which will surely be a major issue in next year elections.

Pakistan has repeatedly sought international support but the country has been facing difficulties due to lack of strong tax collection system and significant tax collection.

Read more: Can't afford subsidy on petroleum products: Muftah Ismail

Muftah Ismail said that Pakistan, the fifth most populous country in the world, needs to move towards a new economic model by removing barriers and promoting exports to the world.

"We are a country that benefits the elite, where almost every subsidy goes to the richest people," he said.

He said his immediate goal was to reduce double-digit inflation but that the finance minister's dream did not seem to be coming true at the moment due to the reduction in fuel subsidy.

He denied that Pakistan was in danger of defaulting on its debts, despite the fact that its foreign reserves stood at 10 10 billion and that most of the bilateral debt was with friendly countries China, Saudi Arabia and the United Arab Emirates. ۔

Read also: Muftah Ismail claims suspension of IMF program in the country

With less than a year to go before the announcement of the general election, Shahbaz Sharif, political observers believe that the removal of Imran Khan could have the opposite effect as the new government inherits an economic crisis. Found that will take time to overcome.

But Muftah Ismail said that there is never a wrong time to do the right thing, if what we claim is true and we are really capable, then we should be able to make a difference in a few months and If we don't, people will pick us up and throw us out, which is fine.