The IMF has categorically refused to accept the Ministry of Finance's assurances with respect to the implementation of reformed GST effective October 1 as committed by Dr Hafeez Sheikh, Minister of Finance in his budget speech. Sources said the federal government is confident about explaining the reasons behind partial compliance of other conditions including slippages on the fiscal side, as well as the inter-circular debt.
The recent Special Economic Co-ordination Committee meeting chaired by Prime Minister Yousuf Raza Gilani and attended by Chief Ministers of Punjab, Sindh, Khyber Pukhtoonkhwa and Balochistan agreed to resolve all pending issues with respect to the GST.
The PM also constituted a special committee, to be chaired by the Finance Minister with the mandate to resolve all pending issues within two weeks. This deadline would ensure that the meeting scheduled with the IMF commencing on August 23would be conclusive in terms of Pakistan's compliance with this condition and the consequent release of the second last tranche under the SBA.
The Finance Ministry has maintained that technical issues relating to the implementation of the reformed GST have been agreed with the provinces, however, the federal government wants the provinces to announce this agreement. Sindh government sources told BR that they would not allow the Centre to abrogate their constitutional right to impose and collect GST on services.