Pakistan and the International Monetary Fund (IMF) are close to finalizing a revised tax collection target of Rs. 13.45 trillion for the current fiscal year. Officials from both sides are holding virtual discussions to reach a staff-level agreement under the $7 billion Extended Fund Facility.
Sources indicate that the Federal Board of Revenue (FBR) is unlikely to meet the previously set tax-to-GDP target of 11 percent for FY26. The revised projection expects the tax-to-GDP ratio to reach 10.6 percent by June 2026, with overall FBR collections estimated at Rs. 13.45 trillion.
The original tax collection target was Rs. 14.13 trillion, which was later adjusted to Rs. 13.979 trillion after discussions with the IMF. This is the second downward revision for the current fiscal year, reflecting revenue challenges faced by Pakistan.
Despite the lower tax target, Pakistan’s real GDP growth is expected to meet the original 4 percent target for FY26. Strong performance in the first quarter has supported this projection. Earlier, the IMF had revised the FY26 growth forecast to 3.2 percent due to the impact of last year’s floods. CPI inflation is now projected at 7–7.5 percent.
On the external front, the State Bank of Pakistan continues to purchase dollars to strengthen foreign exchange reserves. Despite ongoing tensions in the Middle East, the current account deficit is expected to remain within 0–1 percent of GDP in FY26.
Officials say the revised tax target aims to maintain fiscal stability while supporting economic growth. The ongoing talks with the IMF are crucial to secure continued financial support and maintain investor confidence in Pakistan’s economy.
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The discussions highlight Pakistan’s efforts to manage revenue shortfalls while keeping the economy stable amid both domestic and global challenges.
