Govt working on 174 IMF-sought tweaks, NA panel told

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The Pakistan government is preparing 174 amendments requested by the IMF aimed at improving governance in the financial sector, state-owned enterprises, remittances, and climate change. These changes, including updates to the Sovereign Wealth Fund law and sugar policy, will be presented to parliament for approval amid ongoing IMF program reviews.

• Proposed changes to be placed before parliament for approval • IMF mission to begin its review on 28th; Kristalina praises Pakistan’s performance in meeting with PM Shehbaz • Sovereign Wealth Fund, remittances, sugar policy among areas under discussion ISLAMABAD: The government on Thursday said the International Monetary Fund (IMF) was seeking about 174 amendments to various laws to improve governance in the financial sector, state-owned enterprises, foreign remittances, climate change and local currency integration as part of its two ongoing programmes worth $8.4 billion. “There are a total of 174 amendments the IMF wants to be passed,” Finance Secretary Imdadullah Bosal told the National Assembly Standing Committee on Finance and Revenue, presided over by Syed Naveed Qamar. He said the government was working on the amendments, which would be placed before parliament for approval. The statement came ahead of formal negotiations with a visiting IMF staff mission for the fourth review of the $7bn Extended Fund Facility (EFF) and the third review of the Resilience Support Facility (RSF), beginning on Monday. A day earlier, IMF Mana­ging Director Kristalina Geor­gieva — who met PM Shehbaz Sharif on the sidelines of the UN General Assembly — appreciated the country’s performance under its programme and praised the government’s efforts for economic stabilisation, which she noted were yielding tangible results. Mr Bosal said changes to the Sovereign Wealth Fund (SWF) law were also part of the discussions. He said the IMF had been clearly told that the proposed amendments would be presented to parliament, but their approval remained parliament’s prerogative. The SWF, covering five maj­or blue-chip companies, incl­u­ding OGDCL and Pakistan State Oil, has been a critical debating point of discussion as the IMF wants their governance and financial reporting standards to be brought at par with those applicable to other state-owned enterprises. The SWF group was created as a prospective investment vehicle for government-owned entities from Saudi Arabia, Qatar and the UAE, but little progress has been made. Mr Bosal said the government was also holding discussions with the IMF on remittances, which were critical to Pakistan’s external stability. He said efforts were needed to address costly payment-system impediments, while the IMF had strongly opposed subsidies for facilitating remi­ttances. Such subsidies, which had previously crossed Rs120bn, have already been withdrawn. He said changes to the sugar policy were also among the benchmarks for the IMF review and that the federal government had circulated a draft policy for liberalisation. Three provinces had agreed to the policy, while one had raised reservations that needed to be addressed. Committee Chairman Nav­eed Qamar questioned the government’s strategy for power distribution companies (Dis­cos), particularly the fate of loss-making entities. “You will give away the profitable Dis­cos, but what will happen to the remaining ones?” he asked. The panel stressed that economic reforms should be underpinned by a coherent, transparent and sustainable strategy, particularly where their implementation could impose additional costs on consumers, businesses and productive sectors of the economy. Mr Qamar said fiscal consolidation should be accompanied by measures to promote investment, exports, employment and sustainable economic growth. Members emphasised that assessment of the IMF programme should not remain confined to formal compliance with prescribed benchmarks but should also determine whether reforms were translating into measurable economic and social outcomes. The committee sought clearer information on implementation timelines, outstanding commitments, effectiveness of public expenditure and the implications of various reforms for citizens, businesses and taxpayers. The finance secretary reported that approximately $4.5bn had been disbursed by the IMF and three programme reviews had been completed. He said the programmes were supporting balance-of-payments needs and macroeconomic stability while requiring reforms relating to revenue mobilisation, debt sustainability, fiscal consolidation, taxation, the energy sector, SOE governance and trade liberalisation. The committee was informed that key programme commitments included parliamentary consideration of supplementary expenditure beyond approved budgets, restrictions on new tax amnesties and preferential tax treatment, energy-sector reforms and implementation of the National Fiscal Pact with the provinces. The panel also examined the retailer tax-registration scheme, with members questioning its limited initial participation and seeking a measurable assessment of its effectiveness. The committee called for an evaluation covering the number of registrations, revenue generated, compliance outcomes and whether the scheme’s existing design required further adjustment. It stressed that the finance ministry s