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Rs 15.00 | Vol XIII No 224 I 12 Pages I Islamabad Edition
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MORE DIFFICULTIES FOR INFLATION-HIT MASSES AHEAD
RS170B MORE TAXES BEFORE MINI-BUDGET TO SECURE BAILOUT PACKAGE, SAYS DAR g
SAYS COUNTRY WOULD RECEIVE $1.2B DISBURSEMENT IN FORM OF SPECIAL DRAWING RIGHTS AFTER REVIEW’S COMPLETION PROFIT REPORT
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SAYS PDL ON PETROL ALREADY RAISED TO RS50 AND NOW PDL ON DIESEL TO BE RAISED TO RS50 PER LITRE IN COMING MONTHS
IMF to continue virtual discussions with Pakistan to finalize deal
MOMINA ASHRAF
FTER the International Monetary Fund (IMF) issued its press release about concluding their visit to Pakistan, finance minister Ishaq Dar announced a tax imposition of Rs 170 billion before the mini-budget to secure the bailout package. The press conference which was scheduled to take place late night on February 9, 2023, to deliver, as promised by the minister a ‘good news’ was delayed to early morning of February 10. Despite the ten days talk, from January 31 to February 9, a staff-level agreement about the bailout package could not be achieved. Dar said in the presser that the talks had ended positively and tax collection of Rs 170 billion was necessary to revive the loan programme. He also confirmed that Memorandum of Economic and Financial Policies (MEFP) has been received. “I am confirming that the MEFP draft has been received by us at 9am today,” he said. “We will completely go through the draft over the weekend and will hold a virtual meeting with fund officials on Monday. It will obviously take a few days.” The MEFP is a key document that describes all the conditions, steps and policy measures on the basis of which the two sides declare the staff-level agreement. The finance minister shared that the country would receive a $1.2bn disbursement in the form of Special Drawing Rights after the review’s completion. Further policy agreements The minister clarified that the fiscal gap of Rs 170 billion will be recovered through indirect taxes as opposed to rumours around Rs 700-800 billion fiscal gap. The measures will take the shape of indirect tax, instead of direct tax to “minimise the burden on the common man as much as possible,” he added.
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In addition, the government had agreed to minimise untargeted subsidies in the energy sector. There has also been an agreement to not increase the gas sector’s circular debt. The minister highlighted that the government had already fulfilled the commitment to raise the petroleum development levy (PDL) on petrol to Rs 50 per litre, whereas the PDL on diesel would also be raised to Rs 50 in the coming months. However, the general sales tax would be readjusted within the upcoming finance bill and prices of petrol will be increased in two phases by Rs 5, on March 1 and April 1. Additionally, some relief measures have also been agreed upon. The Benazir Income Support Programme’s (BISP) allocation has been increased from Rs 360 billion to Rs 400 billion to support the most vulnerable in the economy. During the conference, Dar mentioned that the government’s performance has weakened the credibility with the IMF has weakened. “They say not only did the previous government not implement the agreement but also reversed when the vote of no-confidence was brought (against Imran Khan),” he remarked.
PROFIT REPORT: The International Monetary Fund (IMF) has informed the Pakistani economic team that it will continue virtual discussions in the coming days to finalize the implementation details of policies such as revenue measures, untargeted subsidies, market determined exchange rate and preventing further accumulation of circular debt. IMF in its statement stated that an IMF mission led by Nathan Porter visited Islamabad during January 31- February 9 to hold discussions under the ninth review of the authorities’ program supported by the IMF Extended Fund Facility (EFF) arrangement. “The IMF team welcomes the Prime Minister’s commitment to implement policies needed to safeguard macroeconomic stability and thanks the authorities for the constructive discussions. Considerable progress was made during the mission on policy measures to address domestic and external imbalances”. Key priorities include strengthening the fiscal position with permanent revenue measures and reduction in un-targeted subsidies, while scaling up social protection to help the most vulnerable and those affected by the floods; allowing the exchange rate to be market determined to gradually eliminate the foreign exchange shortage; and enhancing energy provision by preventing further accumulation of circular debt and ensuring the viability of the energy sector. The timely and decisive implementation of these policies along with resolute financial support from official partners are critical for Pakistan to successfully regain macroeconomic stability and advance its sustainable development. “Virtual discussions will continue in the coming days to finalize the implementation details of these policies,” it concluded. Earlier, this morning, Finance Minister Ishaq Dar in a news conference said that the government would impose Rs 170 billion fiscal measures through taxes as part of the prior actions of the 9th review of the IMF programme. Finance minister said everything was mutually agreed after which the Fund’s courtesy call was also arranged with Prime Minister Shehbaz Sharif through the Zoom meeting and the premier reiterated commitment to implement the agreed reforms. He said that reforms in the energy sector included to stop flow of circular debt, minimizing untargeted subsidies, and the flow of circular debt in the gas sector to be reduced to zero from Rs 260270 billion. Dar said that fiscal measures would be introduced through Ordinance or Bill in the Parliament. Dar added that the commitment of petroleum levy has almost been fulfilled except Rs10 per litre increase on diesel – to Rs 50 from Rs 40 – ad this would be increased in two instalments of Rs 5 each from March and April, adding that sales tax on petroleum products was not agreed with the Fund. The Finance Minister said that after reaching an agreement on board contours of the review, draft MEFP is provided to Pakistan and he would go through it ahead of a virtual meeting with the Fund on Monday. He said that Pakistan would be disbursed US$ 1.2 billion once the review is approved by the Executive Board meeting of the IMF. SHAHZAD PARACHA CONTINUED ON PAGE 05
LHC orders ECP to announce Punjab polls date ‘immediately’ LAHORE STAFF REPORT
The Lahore High Court (LHC) on Friday ordered the Election Commission of Pakistan to immediately announce the date for elections in Punjab. Pronouncing the much-anticipated verdict reserved earlier in the day, LHC Justice Jawad Hassan ruled that the ECP was bound to carry out elections within 90 days of the assembly’s dissolution and that it should issue the election schedule. “The ECP is directed to immediately announce the date of election of the Provincial Assembly of Punjab with the notification specifying reasons, after consultation with the governor of Punjab, being the constitutional head of the province, to ensure that the elections are held not later than ninety days as per the mandate of the Constitution,” reads the court verdict. The PTI had on Jan 27 approached
the LHC seeking orders for the Punjab governor to immediately announce a date for an election in the province since the assembly had been dissolved on Jan 12. The ECP had recommended the elections be held between April 9 and 17. Legally, an election must be held within 90 days of an assembly’s dissolution. The petition, filed through PTI General Secretary Asad Umar, stated at the time that more than 10 days had passed since the dissolution of the Punjab Assembly but Governor Rehman had failed to fulfill his constitutional duty of announcing an election date. PTI Vice President Fawad Chaudhry welcomed the “historic” decision, saying that it was a victory for the Constitution and the law. “The federal government should sit with us and discuss the national election,” he said. PTI Senator Faisal Javed also celebrated the verdict, saying the people would make their decisions in the election. Meanwhile, speaking on TV talk
show, Interior Minister Rana Sanaullah said the government has nothing to do with when the elections should be held. “This [matter] is between the ECP and courts,” he added. However, he said that the government believed that if the general and provincial elections were held together later, they would be more free, fair and acceptable. “The results will be accepted and there will be weight in those elections,” he said, adding that if the elections are held early, people who lose will resort to long marches and staging protests. “If the election is held, we are ready for it. Be it April, October or together, we will contest it.” In the hearing today, Justice Hassan asked about the chief secretary and inspector general of the Punjab police, saying they were also summoned. The two officials arrived at the courtroom as the proceedings were under way. The IG told the court that he was not
aware of the case background. “We will implement whatever decision the ECP takes in this regard,” the senior cop told the judge. The court said it was looking forward to such an assurance from the police chief. The chief secretary also reiterated the stance adopted by the IG, saying he was also bound to implement the ECP and court orders. The commission’s counsel raised objections to the admissibility of the petition, saying the plea pertained to an announcement of the election date, which he said was not the domain of the ECP. He argued that the commission could not be made a respondent in the plea. The counsel said the LHC had itself stated that it would not issue an order whose implementation was complex. He contended that neither the president nor the federal government had been made respondents in the petition. “The police, judiciary, and other institutions have refused to sanction staff for
poll duties. How can we hold elections in such circumstances,” the counsel asked. He said the election date had to be given either by the governor or the president. “We require Rs14 billion for the whole electoral exercise in the province,” the ECP lawyer told the court. He pointed out that the elections of provincial assemblies and the lower house could not be transparent if they were held on separate days. “It is not written anywhere in the Constitution that the ECP will give the date of general elections,” he argued. When he spoke, Punjab governor’s lawyer Shehzad Shaukat said he had submitted a written reply to the court on behalf of his client. In his reply yesterday, the governor said that he was not obligated to announce a date for the general election in the province as he had not dissolved the provincial assembly on the chief minister’s advice.
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