Islamabad: The International Monetary Fund (IMF) has expressed concern over Pakistan’s failure to achieve its tax collection target of Rs 12,970 billion in the last fiscal year.
According to the Federal Board of Revenue (FBR), Pakistan managed to collect Rs 11.74 trillion against the set target of Rs 12.9 trillion. Ahead of the second round of economic review talks, the government’s economic team shared details of tax revenue and fiscal performance with the IMF.
The officials told the IMF that slower economic activity, a sharp decline in inflation, and pending court cases were the main reasons behind the shortfall. Tax disputes worth more than Rs 250 billion remain unresolved, while the quarterly target of Rs 3.1 trillion is also in danger due to these delays.
The sources revealed that the FBR also missed the target of raising the tax-to-GDP ratio to 10.5 percent. However, non-tax revenue saw a notable boost from the State Bank’s profits and petroleum levy collections. Revenue measures linked to the real estate sector also underperformed, while the floods were identified as the key factor behind weaker tax collection in the ongoing fiscal year.
Despite missing the target, the FBR reported some positive indicators. The number of income tax filers rose from 7 million to 7.7 million. Pakistan also achieved a primary surplus of Rs 2.4 trillion — the highest in 24 years — while the fiscal deficit was limited to 5.4 percent of GDP, better than expected. Still, provinces failed to deliver on their surplus budget commitments, falling short by Rs 280 billion.
The Finance Ministry also briefed the IMF on progress regarding the restructuring of the National Finance Commission (NFC) and assured that a meeting with provincial governments will be held soon to finalize the new framework.
You Might Also Like
Pakistan Football Federation unveils new logo after 20 years
PTI’s protests aim to destabilise Pakistan, not secure leader’s release: PA Speaker
Pakistan AV Marshal Aamir Hayat appointed acting CEO of PIA
Health camp to help policemen keep in shape: DIG
Moreover, An International Monetary Fund (IMF) mission has reached Pakistan to begin the second round of economic review discussions under the ongoing loan program. According to official sources, preliminary technical-level consultations are starting today, while high-level policy talks are scheduled to begin on September 29.
The delay in the formal round of negotiations comes due to Finance Minister Muhammad Aurangzeb’s current visit to the United States. The discussions are linked to the release of the next tranche under the $7 billion Extended Fund Facility. Pakistan is expecting approximately $1 billion upon the successful conclusion of this review.
On the opening day, the IMF team will meet with officials from the State Bank of Pakistan (SBP), the Ministry of Finance, and the Federal Board of Revenue (FBR). Over the course of their two-week stay, the mission will hold both technical and policy-level meetings covering key aspects of the economy, fiscal management, and reform commitments.
In addition to routine evaluations, Pakistan has requested some flexibility in loan terms, citing the extraordinary financial burden caused by devastating floods. The IMF, however, is expected to carefully examine the federal budget and track the utilization of allocated funds before deciding on any special relief measures.
Among the proposals under review is the introduction of a temporary “flood levy,” with revenues earmarked solely for federal rehabilitation efforts. Provincial governments have also been asked to enhance their own revenue generation to contribute to disaster-related expenditures.
FBR officials, meanwhile, have clarified that there is currently no plan to introduce a mini-budget or impose new taxes to raise additional revenue. Instead, the government intends to tap into already earmarked emergency funds.
We welcome your contributions! Submit your blogs, opinion pieces, press releases, news story pitches, and news features to spotpakistan25@gmail.com
