Pakistan looks at the FY24 budget in an effort to achieve an IMF agreement.

In a last-ditch effort to finalise a stalled bailout package with the International Monetary Fund (IMF), the federal government has made a number of modifications to its fiscal year 2024 budget, according to Finance Minister Ishaq Dar on Saturday.

Speaking to the National Assembly, he claimed that Pakistan and the IMF had engaged in extensive negotiations as a last ditch effort to conclude the ongoing assessment. The federal government will levy an additional Rs215 billion in new taxes, reduce spending by Rs85 billion, and take a variety of other steps to reduce the fiscal deficit for the fiscal year that begins next month, he added.

According to Dar, the nation had been debating whether or not the IMF’s ninth review would be successful for a few months and he wanted to reassure the population on the matter.

He claimed that although the government had finished all previous tasks and all the Fund’s requirements, Pakistan’s case could not be presented to the organisation because of the lack of external funds.In order to finish the ninth review, thorough conversations were undertaken with an IMF delegation over the course of the last three days, according to Dar, who claimed that Pakistan and the IMF had agreed to make one “last, final push” to forward the review.

The talks, according to the finance minister, led to the proposal for Rs215 billion in additional taxes. He added that care was taken to ensure that the poor and weak would not bear the brunt of the tax burden. He added that the Rs85 billion in spending cuts would be made without affecting government workers’ pay and pensions or the federal government’s budget for development.

Dar provided updated numbers for the FY24 budget, noting that the Federal Board of Revenue’s revenue collection target was raised from Rs9,200 billion to Rs9,415 billion. Increased from Rs5,276 billion to Rs5,399 billion, the provinces’ portion would go to them. The objective for the entire expenditures of the federal government was raised from Rs14,460 billion to Rs14,480 billion.The overall budget deficit will improve as a result of all of the aforementioned steps, according to Dar.

According to the finance minister, the petrol tax will increase from Rs. 50 to Rs. 60 and be capped at the current level for any future revisions. In an effort to reduce the current account deficit, which has been a major worry for the IMF to release the money, he also announced the relaxation of all import restrictions put in place in December. According to Dar, funding for cash distributions to the poor was also reduced from Rs450 billion to Rs466 billion for the fiscal year 2024.

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