The technical level discussions between Pakistan's economic team and the International Monetary Fund (IMF) mission have concluded, while the policy-level negotiations are slated to commence on May 20, according to sources close to the matter. Sources further said that the upcoming talks will be crucial in determining the size of a new loan program, with detailed discussions expected to finalize the future conditions and goals of Pakistan's economic policies. They indicate that these policy-level talks will also establish the tax and non-tax revenue targets for the next financial year. Furthermore, the Finance Ministry will work with the IMF to set macroeconomic targets for the new financial year. These targets will form the backbone of Pakistan’s economic strategy moving forward, ensuring alignment with IMF standards and expectations. 

A staff-level agreement is anticipated at the conclusion of these policy discussions, providing a framework for future economic reforms and financial stability. However, the IMF has yet to give a definitive green light for the final disbursement of funds, indicating that they are meticulously reviewing Pakistan's economic targets and performance. Pakistan's debt crisis has reached alarming levels, with interest payments on loans exceeding the government's income by a staggering Rs205 billion in just nine months. The country's total debt and liabilities have ballooned to over Rs80,086 billion, according to the State Bank's statistics. As negotiations with the International Monetary Fund (IMF) for a new bailout package continue, the government is under pressure to reduce its expenditure and bring down the debt ratio.

Sources close to the negotiations reveal that the upcoming budget will include strict measures against unregistered traders, aiming to bring them into the tax net. Notices will reportedly be sent to businesses not registered through the 'Tajir Dost' app, and penalties under Section 182 of the Income Tax Ordinance are anticipated for non-compliance. Unregistered businesses could face fines of up to Rs10,000, as per the sources. Moreover, in a bid to curb tax evasion and enhance revenue collection, the budget is expected to propose increased taxes on cash withdrawals by non-filers. Currently, non-filers are subjected to a 0.6% advance tax on bank withdrawals exceeding Rs50,000.

Credit: Independent News Pakistan