Islamabad:Pakistan has finalized a staff-level agreement with the International Monetary Fund (IMF) for a $7 billion Extended Fund Facility (EFF) to support the country’s loan program. However, the final approval for the 37-month EFF program will be granted by the IMF’s Executive Board.
The agreement with the IMF is conditional upon timely verification of necessary fiscal assurances by Pakistan’s economic and bilateral partners.
The IMF has expressed concerns over the benefits of projects overseen by the Special Economic Zones (SEZs) Council, tax incentives provided to the armed forces under the leadership of Special Capital Investment, and projects that may jeopardize the assured return that could void the contract under the Capital Investments Act.
Finance Minister Muhammad Orangzeb said discussions with provincial governments regarding tax returns are ongoing, with support for staff-level agreements, consultations on external financing needs, and dual financial and multiparty credit providers.
According to a statement by the IMF, Pakistan and its economic and financial policies are consistent with the long-term benefits of the economic and operational policy, the expansion of capital rights, and the improvement in government control.
The statement said that for the promotion of economic and financial policies, adjustments to economic income taxes and services have been effective from January 1, 2025, with income and revenue from competition and agriculture to be applied in tax system.
The promotion of social protection programs and the achievement of the community in Pakistan’s economic and bilateral cooperation will be very important.
The statement said that after a visit to Islamabad, the IMF team headed by Mission Chief Nathaniel Porter held negotiations from May 13 to 23 and supported Pakistani government support for medium-term policy and reform plans in virtual negotiations. After the Federal and State government’s approval, Pakistan and the IMF reached a staff-level agreement of $7 billion for a 37-month extension.
