ISLAMABAD - The four provincial governments on Saturday assured the International Monetary Fund (IMF) for supporting the federal government to adhere to the fiscal framework being discussed with the Fund.

Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh, along with Sindh chief minister and provincial finance ministers of Punjab, Khyber Pakhtunkhwa and Balochistan, met with the IMF mission led by Mr Ernesto Ramirez Rigo.

Pakistan in October 2018 had requested IMF for fresh loan programme for improving its external sector. The loan volume could be $7-8 billion, for which technical talks between the two sides are being held in Islamabad since April 29 and are expected to complete on May 10.

The participants of Saturday’s meeting exchanged views on the existing fiscal situation of the country in the context of the Fund program. The meeting was also attended by the senior officials of finance division as well as provincial finance departments.

The mission was apprised that the federal and provincial governments were constantly engaged on fiscal matters and the National Finance Commission (NFC) and the Fiscal Coordination Committee (FCC) forums were being used for ensuring maximum cooperation and coordination among the federal and provincial fiscal authorities.

Sindh CM and finance ministers of other three provinces apprised the IMF mission of various initiatives taken by them for resource mobilisation at the sub national level to cater to the increasing developmental and social spending needs.

They expressed that the revenues from taxation had witnessed marked improvement recently. The provinces also emphasised that they were managing their expenditures prudently for better fiscal outcomes.

They assured the mission that the provincial governments would support and complement the efforts of the federal government to adhere to the fiscal framework being discussed with the Fund.

The IMF team was encouraged by the shared thinking at the federal and provincial levels. The mission leader appreciated the updates provided by the provincial governments. Ernesto Rigo highlighted the importance of a harmonised system of taxation that would contribute towards increasing economic activities and business growth in the country.

In a brief conversation with journalists following the conclusion of talks, Adviser to PM on Finance Dr Abdul Hafeez Shaikh said initial negotiations were held with the IMF team, which was also briefed on the economic reforms.

Talking to the media, Sindh Chief Minister Syed Murad Ali Shah said, “The IMF team [also] met separately with the finance adviser and he admitted there has been a pressure on the provinces because of the low tax collection.”

Shah said, “The provincial governments have informed IMF that we [provinces] have a better tax collection record.” He added the federal government has to work on its tax collecting method. “We have to work on the shortcomings of our economy, only then we will be able to make things better,” Shah held.