Pakistan Seeks IMF Approval for New Tax to Fund Jinnah Medical Complex
ISLAMABAD: The Pakistan government has reportedly approached the International Monetary Fund (IMF) for approval to impose a new tax through a mini-budget. According to sources, the proposed levy—likely to be introduced as a municipal tax—is intended to finance the construction of the Jinnah Medical Complex in Islamabad, a project estimated at Rs213 billion.
Government’s Request to IMF
Officials confirmed that groundwork for the new tax has already begun amid fears of another mini-budget. The IMF, however, has sought additional details before granting approval, leaving the government in a wait-and-watch position.
The medical complex, designed to be a landmark healthcare facility, is scheduled for completion within three years. But severe financial constraints have forced the government to explore alternative funding models.
Emergency Funds and Financing Options
Sources revealed that the government is considering releasing Rs30 billion from emergency funds to meet immediate requirements. Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal has also hinted at securing external financing outside the Public Sector Development Programme (PSDP).
Additional funding options being reviewed include:
- Supplementary grants
- Diversion of funds from other development projects
- Allocations from returns on $76 million worth of Panda bonds
So far, Rs3.5 billion has been allocated to establish the Jinnah Medical Complex Company and begin staff recruitment.
IMF Review Mission
Meanwhile, the IMF review mission is scheduled to arrive in Pakistan from September 25 to October 08 for the second economic review under the Extended Fund Facility (EFF).
The delegation will begin with technical talks before moving on to policy-level discussions. The IMF team will hold meetings with the Ministry of Finance, the State Bank of Pakistan, FBR, OGRA, NEPRA, and other key institutions.
The outcome of these talks will determine whether Pakistan can move forward with the proposed municipal tax or be forced to adjust its fiscal strategy yet again.
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