Pakistan and the International Monetary Fund reached a three-year, $7 billion aid package deal, the Washington-based institution said on Friday.
The new programme, which needs to be validated by the Fund’s Executive Board, should enable Pakistan to “cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth,” according to a statement.
The agreement is subject to approval by the IMF’s executive board.
“The programme aims to capitalise on the hard-won macroeconomic stability achieved over the past year by furthering efforts to strengthen public finances, reduce inflation, rebuild external buffers and remove economic distortions to spur private sector-led growth,” the IMF statement said, quoting Nathan Porter, the Fund’s mission chief to Pakistan.
“In this regard, the authorities plan to increase tax revenues through measures of 1.5 per cent of GDP in FY25 and 3 per cent of GDP over the programme,” it said. The increase in revenue collections will be achieved through “simpler and fairer direct and indirect taxation, including by bringing net income from the retail, export, and agriculture sectors properly into the tax system”.
