Pakistan was ready to meet the remaining one prior condition of a further increase in the levy on all petroleum products that the International Monetary Fund (IMF) had set for calling the board meeting to revive the programme, said Finance Minister Miftah Ismail on Wednesday.
The minister’s statement should quell speculations that the government might not increase the taxes from August due to the ongoing political crisis. “There is a schedule to gradually increase petroleum levy rates according to which the levy will increase further in the future,” said the finance minister while sticking to the commitments given to the IMF.
The finance minister spoke at a seminar that had been organised under a condition of the foreign lender to qualify for the loan to reform the state-owned enterprises. The seminar was funded through foreign loan proceeds at a time when the country is at the verge of default.
Ismail said that the IMF had set the prior conditions of approval of the new budget, a memorandum of understanding with the provinces to create cash surpluses, raising petroleum levy rates, increasing electricity prices in July, August and October and increasing interest rates. He said that these conditions have been met.
Under the deal with the IMF, the government had imposed Rs10 per litre levy on petrol from July, which will have to be further increased by another Rs10 on August 1 until it gradually reaches to Rs50 per litre.
The petroleum products prices may significantly go up from August due to massive currency devaluation during the past 10 days, which could stoke hyperinflation in the country. The rupee closed at Rs236, having depreciated 1.31%, according to the State Bank of Pakistan (SBP).
The finance minister said that the IMF board meeting would take place later in August, although he wanted the meeting to be held in early August. The IMF board is expected to meet on August 25th.
The finance minister also said that there was a structural benchmark to form a team of experts for the diagnosis of effectiveness of anti-corruption laws. “I have added strings to it that the team will also be determined whether these laws have been used in the past against political opponents and what is the trade-off between efficiency and the anti-corruption laws.”
The previous Pakistan Tehreek-e-Insaf (PTI) government delayed the signing of the cheapest LNG deals in fear of being chased by the NAB, said the finance minister. “In consultations with the IMF, we will appoint a team of world and Pakistani experts to review these laws,” he added.
“Even though we have NAB and PPRA rules for the last 20 years, the corruption in Pakistan has not reduced and the successive governments have not bought cheaper goods,” he said. He again made the case for government-to-government sale deals with the foreign countries by bypassing the existing laws.
