The International Monetary Fund (IMF) engages in extensive discussions with Pakistan's bilateral partners to tackle the financing shortfall.

As reported by 247.pk, the IMF mission, led by Nathan Porter, the chief for Pakistan, and caretaker Finance Minister Dr Shamshad Akhtar, conducted in-depth sessions during the initial day of policy-level discussions.

In background talks, officials expressed confidence in the successful completion of the first quarterly review. The primary objective is to secure the disbursement of the second tranche, amounting to $710 million, from the $3 billion Standby Arrangement (SBA) in early December, contingent upon approval from the Fund's executive board.

Nevertheless, concerns were raised by the IMF mission regarding the $28 billion external financing needs for the ongoing fiscal year. Discussions are scheduled to conclude on November 15 after direct engagements with friendly nations to confirm committed financing.

While authorities remain optimistic about intact bilateral commitments and funds from multilateral sources like the World Bank and Asian Development Bank, uncertainties surround $5 billion in commercial loans and $1.5 billion in planned international bonds due to global economic conditions.

In efforts to bridge the financing gap, officials propose a $2 billion reduction in the current account deficit and seek positive signals from the IMF, bilateral lenders, and inflows from the Special Investment Facilitation Council (SIFC).

The IMF emphasized SIFC-led policies, addressing concerns about potential distortions in investment and revenue policies. The focus is on expanding the tax base, emphasizing an increase in taxpayers rather than solely return filers.

At this stage, the IMF has not called for new taxes or rate increases but suggests broadening the tax net to retailers through a fixed tax scheme. Discussions also covered the implementation of point-of-sale counters for the retail sector and improvements in real estate taxation. Agreement was reached on trigger points for expanded taxation, particularly in December, if necessary. Anti-money laundering operations and legal frameworks covering trade-based money laundering were also part of the discussions.

Officials are optimistic about finalizing the memorandum of economic and financial policies before the mission concludes. There is alignment on restricting development spending at federal and provincial levels, addressing energy sector issues, and managing circular debt flows. The caretaker government has not only met but exceeded the Fund's requirements by retiring over Rs150 billion in guarantees.