ISLAMABAD: The director of the International Monetary Fund (IMF) for the Middle East and Central Asia, Jihad Azour, along with an eight-member delegation arrived in Islamabad on Tuesday to hold formal talks with senior government officials.
In the middle of its arrival, the government intensified efforts to recover around Rs85 billion of additional income from electricity and gas consumers and reaffirm a road map to close the gaps in tax collection.
The visit is described as "routine" by both parties. A representative from the Ministry of Finance said that the delegation, headed by Azour and the Head of Mission in Pakistan, Ernesto Ramírez-Rigo, is here "to review the program as scheduled."
On its first day, the team held informal meetings with the advisor to the Prime Minister of Finance, Abdul Hafeez Shaikh, and the president of the Federal Board of Revenue (FBR), Shabbar Zaidi, on Monday.
The schedule includes meetings with the government, regulators, SBP and MNA
According to the proposed schedule for the visit, the delegation will remain in Pakistan until September 20. Another official said the delegation will hold marathon meetings with Hafeez Shaikh and senior officials of the Ministry of Finance, the Minister of Planning Khusro Bakhtyar, officials of the Planning Commission and the Minister of Economic Affairs Hammad Azhar and his team.
The delegation will also meet with the presidents and members of the National Energy and Electronic Regulation Authority (Nepra), the Oil and Gas Regulatory Authority (Ogra) and the Pakistan Securities and Exchange Commission before traveling to Karachi to hold talks at the State Bank of Pakistan. and other interested parties.
The delegation will also interact with the Permanent Finance Committee of the National Assembly led by former finance minister Asad Umar.
While Nepra has already set a date to hear a claim of Rs63.4bn for an increase in the electricity tariff, the Petroleum Division set out to transfer the cost of Rs22bn of Registered Liquefied Natural Gas imported to residential, transportation and sector consumers. electric to cover the cash deficit of Gas Services.
Sources said critical discussions about FBR's revenue collection challenges were anticipated even though the government expects higher-than-expected non-tax revenue entries to compensate for losses as evidenced by interactions between local IMF staff. and officials of the Ministry of Finance and FBR.
They said that the current FBR revenue target of Rs5.555 billion is based on the assumption of base year revenue of around Rs4.150tr for the past fiscal year, but the real recoveries were only close to Rs3.83tr, leaving a gap of around Rs450bn to start.
On top of that, the deficit in the first two months of the current fiscal year had gone beyond Rs64bn. Based on this, IMF staff had doubts about the revenue target of Rs1.076tr for the first quarter that must be exceeded before the first review, which expires in less than two months.
That's where the delegation seeks to have a political commitment at the highest level during the current commitments, followed by the Prime Minister's next visit to the United States later this week, the sources added.
Some outstanding issues also referred to the amendments in the laws that govern Nepra and Ogra in a way that the prices determined by the regulators are automatically notified without the participation of the executive.
Nepra, which called a public hearing on September 25, will consider the request of the electric companies to pass an additional charge of Rs63.407bn to consumers due to the quarterly adjustments in the 2018-19 fiscal year and the annual adjustment over the cost of the previous period.
On the other hand, the 10 distribution companies (Disks) have also sought an upward adjustment of Rs30.262bn due to the variation in the Fuel Purchase Price for the last two quarters of 2018-19, while three of the Disks They have also looked for annual adjustments. from the cost of the previous period of Rs33.145bn.
The government had already transferred quarterly adjustments of Rs190bn to consumers under the IMF program a few months ago along with an increase of up to 146pc in the gas rate.
Prime Minister Hafeez Shaikh's advisor described the delegation's visit on Sunday as a matter of course that is unrelated to quarterly reviews.
The finance ministry has said that its reform agenda signed with the IMF was on track and that so far progress in almost all structural and performance benchmarks for the first quarter of the current fiscal year was very encouraging with a strong indication of that the objectives will be achieved.
“The progress in almost all structural and performance benchmarks during Q1FY20 is encouraging and the objectives will be met. The finance ministry is fully committed with the IMF towards the ongoing reform program, ”said the ministry about a week ago.
Posted on Dawn, September 17, 2019
Source: https://www.dawn.com/news/1505637/with-revenues-in-focus-imf-team-lands-to-review-programme-progress