ISLAMABAD: The International Monetary Fund (IMF) demand for slapping additional taxes of billion of rupees on the people in the budget for the financial year 2016-17 in order to pay back its loans has put the government under hot water in terms of preparation of the upcoming budget. The IMF has come up with certain new demands including reduction in funds for national development projects, increasing tax collection target from Rs 3104 billion to Rs 3650 billion, restricting budget deficit to 3.5 per cent of GDP from 5.2 per cent of GDP, reduction in defence budget, privatisation of nine key entities of the country including Pakistan Steel Mills, increase in regulatory duty on imports and exports and withdrawal of more concessional SROs. According to finance ministry sources, talks between the finance ministry and FBR are still under way. The negotiations are continuing on release of the remaining two tranches of 1.1 billion dollars each out of 6.7 billion dollars till September 2016 under the Extended Fund Facility (EFF) Program. The budget for the financial year 2016-17 is being termed vital for working out a road map for the return of loan on the conclusion of IMF Program in September 2016. Sources said that the Pakistan delegation comprising Federal Secretary Waqar Masood, Chairman FBR, Nisarullah, FBR spokesman Dr Muhammad Iqbal and Special Assistant to Prime Minister (PM) on revenue Haroon Akhtar, will hold talks with the IMF team. Sessions of talks were held between the government of Pakistan and the IMF with reference to Pakistan’s economy during the last week.The IMF has not agreed to the road map presented by Pakistan on return of loan following the conclusion of IMF Extended Funds Facility Program and it has sent different proposals in connection with preparations of the next budget. Sources said that Pakistan authorities and the IMF have exchanged views with reference to a new program for acquisition of more loan. More headway is likely to be made in upcoming talks in this respect. The IMF has shown willingness to release the new tranche of 500 million dollars under its Extended Funds Facility Program and its formal announcement would be made at the conclusion of talks.