Miftah claims that the IMF program will be revived within a day or two. Miftah Ismail, Finance Minister, says he is "very hopeful" that the IMF program will be revived.

ISLAMABAD: The International Monetary Fund's (IMF) stalled Extended Fund Facility (EFF) will be restarted within a day or two, according to Finance Minister Miftah Ismail on Monday.

"I am very hopeful that the IMF program will be revived," the finance minister told journalists, as the rupee fell against the dollar due to uncertainty about the fund's program's revival.

The finance ministry was expected to conclude the staff-level agreement by Sunday (June 19) on the basis of revenue and expenditure measures that could result in an Rs152 billion surplus in next year's primary budget — the difference between revenues and expenditures excluding interest payments.

The Fund is still concerned about the Rs9.5 trillion in expenditures projected by the authorities for the coming fiscal year. According to IMF estimates, the revenue measures in the budget are also insufficient to deliver slightly more than the Rs7 trillion target.

To persuade the Fund to restart the program, the government took the toughest measures to end fuel subsidies, raising POL (petrol, oil, lubricants) prices to unprecedented levels.

However, the IMF continues to insist on doing more, despite the fact that Islamabad has become a "desperate borrower," owing to the depletion of foreign currency reserves.

The finance minister told journalists that the government intends to tax the wealthy while providing relief to the poor in the fiscal year 2022-23 budget.

"The IMF has nothing to do with salary increases." The tax exemption for people earning less than 1.2 million [annually] will also be maintained, according to the finance minister.


Taxes on real estate

In response to proposed property taxes, Miftah stated that once construction begins on an empty plot, it will be exempt from taxes.

"Lay one brick on the undeveloped land, and the taxes will be waived." "However, we will not levy a tax on anyone who has not obtained possession of a plot or has not received permission to begin construction on it," he said.

The finance minister stated that if a person has been granted permission to begin construction on a piece of land but does not begin construction, they will be required to pay the tax.

The finance minister suggested a 15% capital gains tax on immovable property for a one-year holding period, which will be reduced by 2.5 percent for each additional year in the coalition government's first budget.

Furthermore, he has suggested increasing the advance tax on the acquisition of real estate from 1% to 2% for filers and 5% for non-filers.

The rupee's fall continues

In accordance with market forecasts, the Pakistani rupee fell further and broke the 210-threshold versus the US dollar in intra-day trade for the first time today in the interbank market.

According to the State Bank of Pakistan, the local currency finished at Rs209.96 versus the US dollar in the interbank market, down Rs1.21, or 0.65%. (SBP).

According to economic analysts, if Pakistan does not finalize the agreement with the money lender, its currency would continue to decline against the US dollar.

"The currency will continue to collapse until Pakistan achieves a staff-level agreement with the International Monetary Fund (IMF)," Adnan Agar, Director of AA Commodities, told Geo tv.

The Exchange Companies Association of Pakistan (ECAP) Chairperson Malik Bostan cited a growing trade imbalance, political insecurity, and decreased foreign direct investment as primary factors for the local currency's depreciation.

"Political stability is critical for economic progress," he added, adding that former Prime Minister Imran Khan's proposal for another lengthy march might have a negative impact on the rupee-dollar parity.

If the IMF agreement is reached, traders estimate the rupee to trade in a band of 195-200 per dollar till the conclusion of the current fiscal year 2021-22.