IMF, Pakistan Deadlocked on Governance Report as Talks Wrap Up

Pakistan and the International Monetary Fund (IMF) remain at odds over the release of a governance and corruption report, sources told ProPakistani. The issue remains a central point of discussion as the two sides conclude their latest round of negotiations, with the IMF mission set to depart today. During the talks, the Pakistani government proposed establishing a task force to review the country’s anti-corruption framework. New rules have been drafted requiring civil servants from grades 17 to 22 to submit asset details to the Federal Board of Revenue (FBR), officials briefed the IMF. Amendments to the Civil Servants Act of 1973 are also under consideration, as well as changes to the Election Act to require non-elected advisers and assistants to declare their assets. Discussions are ongoing regarding the powers and coordination between the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA). The government has also proposed investing in modern technology and training for investigative agencies, and launching a public awareness campaign to prevent corruption and improve access to information.   Sources say there is a proposal to grant provincial anti-corruption agencies the authority to investigate money laundering cases. Pakistan has also requested that incentives for Special Economic Zones (SEZs) not be withdrawn, and has appealed for a review of the IMF’s condition to end all tax exemptions by 2035. Islamabad has asked the IMF to reconsider decisions based on third-party studies and has prepared a 10-year plan for phasing out SEZ incentives. If the IMF does not accept the proposal, all incentives will be gradually withdrawn. Pakistan and the IMF have agreed to end the baggage and gift schemes, sources said. The deadline for tightening the third scheme, “Transfer of Residence,” has been set for October 15. The import of five-year-old vehicles will only be allowed under certain conditions, and only vehicles used for one year will be permitted under the Transfer of Residence scheme. Measures are being put in place to prevent the misuse of importing vehicles from Japan and the UK via Dubai. The Economic Coordination Committee of the Cabinet is expected to approve these measures within the month, and Pakistan will provide the IMF with an update on decisions by October 15.