Disagreement has emerged between Pakistan’s negotiators and the IMF over fiscal figures, but the government has so far shown reluctance to impose any additional taxes through a supplementary budget for the remainder of the current fiscal year.
Divergences between Pakistan and the IMF
The budget deficit target is likely to be revised, but the IMF is asking the Pakistani authorities to stick to ensuring a core surplus.
The IMF has criticized the financial status of Punjab, saying that it has failed to collect the required revenue and curb its rampant expenditure. The powers to do so should be delegated and when collected, these revenues should be handed over to the most populous province of the country after deducting the collection fee.
The IMF wants fiscal federalism to be improved and has suggested that the NFC award be revised on an interim basis by consensus of the Center and the provinces.
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At present, the IMF wants to guarantee and fully implement the budget targets for the fiscal year 2024 through better communication including improving the memorandum of understanding with the federal government of the provinces.