IMF loan conditions review meet on Thursday
Staff Reporter :
The second meeting of the “Coordinating Committee on the Implementation of Policy Actions of the IMF Program 2022” will be held on Thursday.
The meeting will review the progress of policy actions under the Extended Credit Facility (ECF), Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programs till June 2023.
Bangladesh Bank Governor, National Board of Revenue (NBR) Chairman, Department of Internal Resources, Ministry of Commerce, Power Department and nominated officials of Department of Economic Relations will be present.
Bangladesh received the first installment of $ 476 million from the proposed $4.7 billion loan from the International Monetary Fund (IMF) on February 2 and there are six more installments left.
The IMF usually reviews various aspects of compliance before disbursing each tranche. Accordingly, an IMF team will come next September to review the fulfillment of loan conditions before disbursing the second tranche, which is scheduled to be disbursed in November.
IMF approved about $3.3 billion under the Extended Credit Facility ECF) and the Extended Fund Facility (EFF), and about $1.4 billion under the Resilience and Sustainability Facility for Bangladesh.
There are around 38 conditions against loans. Among the conditions, tax-GDP ratio needs to be increased by 0.5 per cent in 2024 and 2025, and 0.7 per cent in 2026 and so, has specified exact tax revenue targets (Tk395,100 crore by June, and Tk404, 000 crore by December).
In order to meet these targets, Bangladesh must enact sweeping reforms and it has already pledged to raise the number of taxpayers to 10 million by 2026, improve IT-administration, and simplify the tax code.
But, Bangladesh still lagged behind fulfilling the conditions in many sectors till the deadline (June this year) and the country wants extension of till September to meet the loan requirements.
“The meeting will discuss the overall progress of the IMF’s loan requirement and outcome of the review meeting will be placed before the delegation of the mission,” an official of the Finance Ministry said wishing his anonymity.
