Business

‘Close’ to agreement with Pakistan on review: IMF chief

Published

1 year ago

Farwa

Policy-level talks close to success, say sources.
Windfall tax to be levied for financial years 2021, 2022.
IMF, economic team likely to prepare MEFP today.

International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva said that the review of the policy talks with Pakistan is expected to come within this week.

“I expect an agreement of the review to come within this week. So any day now,” said the global lender’s chief told Bloomberg on Wednesday while assuring the anchor that a deal was very “close”, as Pakistan inches closer to successful policy-level talks with the IMF.

“The Pakistani authorities and the minister of Finance deserve credit for, in a very difficult time, sticking to the programme that they had,” said the IMF chief.

She continued to say that the major issue in Pakistan was tax collection. “The country today collects 12% tax to GDP. We are saying [that] it has to be at least 15% to have the revenues, to sustain the functioning of your economy.”

“So, please, for the people in Pakistan that can pay taxes, collect it from them,” she added.

Meanwhile, officials privy to the ongoing talks between Pakistan and the IMF mission told Geo News, on the condition of anonymity, that Islamabad has agreed to impose a 40% windfall tax on the profits of the banking sector under the global lender’s conditions in a bid to secure the second tranche for the staff-level agreement under the $3 billion Standby Arrangement (SBA).

The IMF mission — led by Nathan Porter — and the Pakistani economic team have also completed discussions on all sectors, added the sources.

The Pakistani delegation was led by Caretaker Finance Minister Shamshad Akhtar and comprised State Bank of Pakistan (SBP) Governor Jameel Ahmad, Federal Board of Revenue (FBR) Chairman Malik Amjed Zubair Tiwan, and officials from the finance and energy ministries.

The sources further said that windfall taxes of up to Rs55 billion will be levied for the financial years 2021 and 2022. The taxes on the profits earned by the banks will be received in the month of December.

According to sources within the Finance Ministry, the Finance Bill does not require any amendments for the imposition of windfall tax on the banking sector.

“However, approval from the federal cabinet will have to be sought for the windfall tax,” added the sources.

Moreover, the IMF delegation and the economic team are likely to prepare the Memorandum of Economic and Financial Policies (MEFP) draft today, said the sources.

The parties have also agreed to not increase the interest rate further, added the Finance Ministry sources.

Business

February 7, 2025: The value of the Pakistani Rupee (PKR) in relation to the US dollar is unchanged.

Published

11 hours ago

Farwa

KARACHI: The open market exchange rate between the US dollar and the Pakistani rupee (PKR) was Rs279.4 on February 07, 2025, with a selling rate of Rs281.1. The interbank exchange rate between the US dollar and the Pakistani rupee is Rs 278.45, according to Interbank.

There was no movement in the US dollar (USD) from the previous closure of Rs278.

Business

The NORINCO Group is invited by CM Sindh to explore opportunities.

Published

1 day ago

Farwa

Chinese companies have been invited by Sindh Chief Minister Syed Murad Ali Shah to visit Karachi and other regions of Sindh Province in order to observe the quickly growing businesses and investigate prospects in fields like clean energy, infrastructure development, and public transit projects.

Speaking in Beijing to a delegation headed by the chairman of NORINCO International Co., Ltd., he stated that all facilities required would be provided by the governments of Sindh Province and Pakistan.

With assistance from NORINCO International, the Sindh Chief Minister stated that the Provincial Government will firmly urge North Vehicle and BeiBen to think about setting up a Vehicle Assembly Plant in the Dhabeji Special Economic Zone.

Business

A deal with Pakistan to fight financial crimes has been approved by the Saudi cabinet.

Published

1 day ago

Farwa

In order to strengthen collaboration in the fight against money laundering, terrorist financing, and associated crimes, the Saudi Press Agency announced this week that the Saudi cabinet, led by Crown Prince Mohammed bin Salman, had approved a memorandum of understanding (MoU) with Pakistan’s Financial Monitoring Unit (FMU).

Due to its severe money laundering and terrorism funding issues in recent years, Pakistan was added to the Financial Action Task Force’s (FATF) grey list in June 2018.

The nation was taken off the gray list in October 2022 after enacting extensive measures to fortify its financial system.

The FMU is Pakistan’s financial intelligence unit, created under the Anti-Money Laundering Act of 2010 and tasked with collaborating with foreign partners and evaluating reports of suspicious transactions.

According to the SPA, “the cabinet approved a memorandum of understanding regarding cooperation in exchanging investigations related to money laundering, terrorist financing, and related crimes between the Financial Monitoring Unit in the Islamic Republic of Pakistan and the General Department of Financial Investigation at the Presidency of State Security in the Kingdom of Saudi Arabia.”

The MoU is an indication of Saudi Arabia and Pakistan’s growing strategic partnership. A significant Pakistani diaspora resides in the Kingdom, and numerous Pakistani businesses have established a presence there.

Saudi Arabia has been a key supporter of Pakistan’s economy, bolstering its reserves with substantial deposits in the State Bank of Pakistan and offering deferred oil payment facilities.