The Pakistan flag (Representative Image)
Credit: iStock Photo
Islamabad: Pakistan's Finance Minister Muhammad Aurangzeb on Thursday said that the government was hoping to reach a deal with the IMF this month to secure a fresh bailout package, as he asserted that talks with the global lender were progressing "positively".
Dollar-starved Pakistan is bending its back to the limits to clinch the International Monetary Fund (IMF) deal of more than $6 billion.
"The talks with the IMF are progressing positively," the finance minister said while briefing the National Assembly's Standing Committee on Finance.
He expressed optimism about the positive progress in talks between Islamabad and the Washington-based global lender to reach a staff-level agreement on a new bailout programme in July.
He said that the IMF is forcing Pakistan to make tough decisions, including new taxes already imposed in the budget.
"The Fund requires taxation on the actual income, which is fair," the minister said.
Asserting that no country could run on a 9 per cent tax-to-gross domestic product (GDP) ratio, Aurangzeb pledged to raise the ratio to 13 per cent.
Last month, the government presented the tax-loaded Rs 18.877 trillion budget for the fiscal year 2024-25 (FY25) aimed at shoring up public revenue to satisfy the IMF.
However, the IMF is reportedly still not happy and wants to put more tax on the agriculture sector, which was largely allowed to pay a nominal tax in the past.
The minister, while addressing the standing committee, further stated that some changes were being made in the service structure of the military, asserting that the entire structure needed amendments.
He said a system of contributory pension for Pakistan's armed forces will be launched.
The finance minister said the system had been notified for the civil servicemen from July 1, 2024; however, a new pension scheme for the military servicemen will be applicable from July 1, 2025.
"Those joining service from July 1 will receive their pensions under the new scheme," he added.
Aurangzeb also said all the economic indicators remained positive during the last fiscal year, while the foreign exchange reserves remained well above $9 billion.