IMF stops loans to Pakistan till imposition of VAT
By IANSTuesday, June 8, 2010
ISLAMABAD - The International Monetary Fund (IMF) has stopped the release of loans to Pakistan till the imposition of Value Added Tax (VAT), leading to the withholding of $1.15 billion, including budgetary support of $363.7 million.
The IMF has told Pakistan not to expect the release of loans unless VAT is imposed, Online news agency reported, quoting sources.
Sources in the finance ministry said Pakistani officials were scheduled to hold talks with IMF in the first week of August but this had now fallen through.
The sources said that the resident mission of IMF has also asked the ministry to fulfill its pledge to the World Bank to hike electricity rates by six percent.
VAT was to be imposed in the budget for 2010-11 presented on Saturday but this could not be done due to differences between the federal and provincial governments.
