Pakistan’s economic team recently held the second round of review talks with the IMF. Officials shared detailed data on tax collection, revenue shortfalls, and overall fiscal performance.
The IMF expressed concern that Pakistan missed its tax collection target of Rs12.97 trillion for the last fiscal year. The Federal Board of Revenue (FBR) reported collecting Rs11.74 trillion. Officials said several factors contributed to the shortfall. These included slow economic activity, declining inflation, devastating floods, and delayed court decisions on tax cases worth over Rs250 billion.
The quarterly revenue target of Rs3.1 trillion is also at risk. Authorities warned that Rs140 billion would need to be collected daily to stay on track. The tax-to-GDP ratio target of 10.5% was not met, achieving only a 1.4% increase. A slowdown in the real estate sector and reduced non-tax revenues from the State Bank and petroleum levies also affected overall collections.
Despite these challenges, Pakistan achieved some fiscal milestones. The country recorded its highest primary surplus in 24 years, reaching Rs2.4 trillion. The fiscal deficit was limited to 5.4% of GDP. The number of income tax filers also grew from seven million to 7.7 million, showing an expanding tax base.
The IMF was also briefed on provincial budget shortfalls. Provinces collected Rs280 billion less than their surplus budget targets. Officials updated the Fund on efforts to restructure the National Finance Commission (NFC) and confirmed that a new NFC meeting would soon be held.
FBR officials highlighted ongoing reforms and compliance measures. They also presented plans to address potential revenue gaps and shared updates on legislation aimed at widening the tax net.
The IMF emphasized the need for Pakistan to accelerate reforms, strengthen coordination with provinces, and boost tax collection. With ambitious quarterly targets ahead, authorities face mounting pressure to stabilise the economy.
In other related news also read Pakistan Govt Challenges Draft Corruption Report By IMF Authorities
