Pakistan has begun negotiations with the International Monetary Fund (IMF) for the next $1 billion tranche of its $7 billion loan program, with discussions starting today and expected to last for two weeks, according to the Ministry of Finance. The government has already met most of the IMF’s stringent conditions and will now assure the agency that the tax collection target for the current fiscal half-year will be reached. Additionally, Pakistan plans to seek flexibility on two fronts: addressing the shortfall under the trader-friendly tax scheme and accommodating delays in provincial agricultural tax legislation.
Led by IMF mission chief Nathan Porter, the talks will initially focus on technical details before moving to policy-level negotiations. The discussions will evaluate Pakistan’s economic performance for the period from July to December 2024, with a successful review set to unlock the next $1 billion tranche.
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The Ministry of Finance highlighted that Pakistan has met key IMF conditions—provincial budgets have achieved a surplus of Rs776 billion against a target of Rs750 billion, and provincial revenues have reached Rs442.4 billion, exceeding the Rs376 billion target. However, the Federal Board of Revenue (FBR) collected only Rs5.624 trillion in the first half of the fiscal year, falling short of the Rs6.008 trillion target by Rs384 billion.
The government is expected to assure the IMF that this gap will be closed in the second half of the year. Meanwhile, during the negotiations, the Pakistani team will request leniency regarding the unmet tax target under the trader-friendly scheme and the delay in passing provincial agricultural tax legislation.
