IPPs contracts causing economic problems in Pakistan: IMF officials

International Monetary Fund has said the Pakistani government’s contracts with IPPs (Independent Power Producers) are causing economic problems in the country, reported 24NewsHD TV channel.

IMF officials, however, refrain from commenting on speculations about change of government in the country.

IMF claimed that international lenders cannot comment on the finality of the new IMF program. The officials said the timeline for releasing instalments of the new IMF package was being prepared.

The government of Pakistan should not take any steps that may affect the budget targets.

Pakistan will have to take steps on its own to deal with political challenges and the government was taking steps to deal with inflation. Every sector will have a role to play in tax reform. IMF said the cooperation between the federation and the provinces was necessary for the creation of a new tax structure. The authorities fear the government may not achieve tax collection targets and may resort to a mini-budget.

While the agricultural tax target depends on cooperation between the provinces and the federation.

IMF officials are of the view that income tax and agriculture tax may be implemented in the country.

Decisions on the privatization of PIA and power companies will have to be made under the new IMF programme.

IMF says it is up to the market to determine the value of the dollar and not the government.

Reporter: Waqas Azeem