IMF asks Pakistan to broaden tax net as talks on budgetary targets conclude

Pakistan has assured the International Monetary Fund (IMF) that it will maintain two per cent primary surplus target for the next financial year (FY), 2026-27 as talks between the two sides on the budgetary targets for the next FY concluded on Wednesday, reported 24NewsHD TV channel on Thursday.

The IMF has stressed the need for broadening the tax net.

The Fund also asked Pakistan to cut government spending and speed up work on reforms.

The declaration issued at the end of the meeting stated that the State Bank of Pakistan (SBP) would continue to follow tight monetary policy in order to control inflation.

The IMF delegation, led by Iva Petrova, toured Pakistan from May 13 to May 20.

On Wednesday, 24News TV channel reported that the International Monetary Fund (IMF) had expressed serious concern over the solar policy of Pakistan.

According to details, in the new solar policy, old and new consumers were separated.

The net metering system was maintained for the old consumers of solar panels, while a cross-subsidy will be provided to the old consumers.

The old solar panel consumers were not shifted on net billing. Officials said that the net billing model is as per the international standard.

The officials will brief the IMF about the privatization of DISCOs. Officials further revealed that the privatization processes of three DISCOs are underway.

A system is already finalized for the restructuring of the transmission network. The first wholesale auction will be conducted in the middle of June 2026.

Govt to finalize agreements with IPPs by June

The government has decided to finalize agreements with all the Independent Power Producers (IPPs) by June, reported 24NewsHD TV channel on Thursday.

Sources told the 24News TV channel that a proposal was under consideration to waive fines imposed on the IPPs.

Besides that, sources informed, the money lending organization had asked the government to cut down its expenditures and speed up work on reforms.

They said that there was a proposal to give subsidy of Rs830 billion to the power sector in the budget for the next FY.

Similarly, there is a proposal to announce subsidy for power distribution companies, including the Karachi-Electric, and tube-well consumers.

Sources went on to say that there was also a suggestion to ensure the payment of dues in order to get rid of circular debt.

Besides that, they informed, a proposal had been put forward to limit circular debt in the energy sector to Rs300 billion in the next FY.

On the other hand, the IMF, in its declaration, has said that talks with Pakistan on the country’s budget for the next FY will continue in days to come.

Reporter: Waqas Azeem