The International Monetary Fund (IMF) has rejected Pakistan's request for tax exemptions on foreign investment projects, as reported by the Express Tribune. This decision reflects the IMF's commitment to fiscal discipline, prioritizing long-term economic stability over short-term incentives.

The Special Investment Facilitation Council (SIFC) had proposed these exemptions during a briefing to an IMF delegation, highlighting their potential to boost foreign investment. However, the IMF maintained its stance on maintaining sustainable financial practices.

During the briefing, Pakistani officials presented various investment opportunities, governance frameworks, and infrastructure development plans. A key focus was on a proposed railway project connecting Chagai to Gwadar, which aims to facilitate the transportation of minerals from the Reko Diq mine to the port city.

This project is seen as strategically important for economic growth, but potential foreign investors have requested state guarantees before committing funds. Unfortunately, under the current loan agreement, the Pakistani government cannot offer such guarantees for every project.

In related developments, the IMF has agreed to consider lowering electricity prices, with a final decision expected next month. The base tariff for electricity could decrease by 1 to 2 Rupees per unit, with adjustments to be made by the National Electric Power Regulatory Authority (NEPRA) and the Ministry of Energy.

However, the IMF has expressed concerns about the slow pace of privatization in Distribution Companies (DISCOs), emphasizing that progress in the power sector will be limited unless these companies' performance is improved. The IMF's stance on tax exemptions underscores its emphasis on maintaining fiscal discipline and ensuring sustainable economic practices in Pakistan.

ANI