The International Monetary Fund (IMF) has rejected Pakistan’s request to grant tax exemptions for foreign investment projects, news said sources on Wednesday.
The Special Facilitation Investment Council (SIFC) had requested exemptions during a detailed briefing at the IMF delegation, arguing that tax relief would help attract foreign investors. However, the world lender refused demand, maintaining his position on tax discipline.
During the briefing, SIFC officials presented investment opportunities, governance structures and infrastructure plans.
A key objective was the proposed railway project connecting Chagai to Gwadar, intended to facilitate the transport of minerals of the Reko Diq mine to the port city.
Pakistani officials urged the IMF to authorize tax exemptions for this strategic initiative, citing its importance for economic growth.
The feasibility study of the railway line was carried out in collaboration with the Ministry of Finance and the Ministry of Railways. Officials revealed that potential investors demanded state guarantees before committing funds.
However, as part of the current loan program, the Pakistani government cannot offer such guarantees to each investment.
Previously, the IMF had accepted the government’s proposal to reduce electricity prices, with a final decision expected next month.
Sources have indicated that the prices of the electricity base could be reduced from Re1 to RS2 per unit, both the National Electric Power Regulatory Authority (NEPRA) and the Ministry of Energy authorized to adjust the rates.
However, the IMF expressed its concerns concerning delays in the privatization of distribution companies (discotheques). The IMF said that energy sector improvements are unlikely without first approaching the performance of these companies.
