Ongoing economic review talks between Pakistan and the International Monetary Fund (IMF) have reached a critical phase, with the IMF rejecting Pakistan’s request for a tax exemption on international investment projects, sources revealed on Wednesday.
During the discussions, officials from the Special Investment Facilitation Council (SIFC) briefed the IMF delegation on investment and governance matters. The delegation was informed that SIFC is playing a crucial role in bridging the gap between investors and the government to facilitate foreign direct investment.
However, the IMF declined Pakistan’s request for a tax exemption on the proposed railway track project from Chagai to Gwadar, which is essential for transporting minerals extracted from the Reko Diq copper and gold reserves.
According to sources, Pakistan had sought the exemption to attract investment for the construction of a new railway line connecting Reko Diq with Gwadar.
A feasibility study on the Chagai-Gwadar rail project has been conducted by the Ministry of Finance, Pakistan Railways, and SIFC. Several foreign investors have expressed interest in the project but are seeking government guarantees to proceed with their investments. However, sources indicate that while Pakistan remains under an IMF loan program, it cannot provide sovereign guarantees for every investment.
The IMF delegation was also briefed on ongoing negotiations between the Ministry of Finance and the Ministry of Law regarding proposed amendments to the Sovereign Wealth Fund.
