Pakistan's finance minister said on Friday that IMF staff have completed their latest economic review, a step towards approval of a further $502 million tranche of its three-year extended fund facility.
Pakistan’s finance minister said on Friday that IMF staff have completed their latest economic review, a step towards approval of a further $502 million tranche of its three-year extended fund facility.
The facility is worth $6.2 billion, officials said.
Upon approval by the IMF’s management, $502 million will be made available to Pakistan, minister Ishaq Dar said in Dubai at a conference held jointly with the IMF.
Dar said inflation in Pakistan fell to 1.8 percent in July but is likely to increase in coming months as commodity prices steady.
He said gross domestic product (GDP) would grow 4.5 percent in the fiscal year to next June, from 4.2 percent in the 2014-15 financial year, citing low oil prices, planned improvements in domestic energy supply, and investment related to the China-Pakistan Economic corridor. In June, Dar predicted GDP growth of 5.5 percent this year.
In March, the IMF released a tranche of $501 million to Pakistan halfway through the loan programme. However, tax collection has been a major problem.
Dar said net taxes have risen, although traders in Pakistan complain that is partly because the government is withholding repayments due to them.
“While the indicative target on tax revenue was missed by a small margin, our revenue collection for the financial year 2014-15 improved by around 15 percent as compared to the last financial year,” Dar said.
No one in Pakistan has been prosecuted for income tax evasion for nearly 30 years. Only about one in 200 citizens files income tax, leaving the state asking donors to fund crumbling schools and hospitals.