The federal government Tuesday assured the International Monetary Fund (IMF) about meeting all tax collection targets apart from implementing other conditions, including increasing the petroleum levy and hiking gas prices.
The IMF has also demanded the government end subsidies on electricity.
This was discussed between representatives of Pakistan and the IMF on Tuesday as both sides held virtual talks ahead of a formal staff review.
Sources in the finance ministry claimed that a Pakistani delegation led by Finance Secretary Hamid Yaqoob Shaikh and an IMF delegation by Nathan Porter, the head of the review mission, had held meetings.
During the talks, the IMF delegation was apprised of the details of the expenditure on flood-related projects.
After significant progress in the virtual talks with the IMF, physical talks with the IMF are likely to be scheduled to complete the economic review and put the program back on track.
It is expected that the IMF team will visit Pakistan this week.
Govt starts preparations for mini budget
The finance ministry has already begun preparations for introducing a mini budget under which the government is likely to impose a three percent flood tax levy on all imported items, apart from other measures to overcome the crushing current account deficit, expensive fuel purchases, and extending capacity for gas and power production.
A source inside the federal finance ministry said that it has been decided that the government will be advised to de-link the value of the US dollar to an arbitrary number and allow it to be decided by the open market, as demanded by the IMF.