The Federal Board of Revenue (FBR) and the International Monetary Fund (IMF) have reportedly agreed to reduce Pakistan’s tax collection target by Rs150 billion. The revised target lowers the annual goal from Rs14.131 trillion to Rs13.981 trillion, reflecting adjustments in the country’s fiscal outlook.
Reports indicate that the IMF has requested a globally verified damage assessment report to justify any further reduction in Pakistan’s tax collection target, particularly after the recent floods. IMF negotiators stressed that Pakistan must achieve GDP growth[1] of 3.5% and a tax-to-GDP ratio of 11% to remain on track with the bailout program.
However, sources warned that Pakistan is unlikely to meet the GDP target of Rs129 trillion set for the current fiscal year. Under the revised framework, the FBR will now aim for GDP growth of 3.5% and a tax-to-GDP ratio of 11%, aligning with IMF expectations.
Officials confirmed that both sides have agreed to revise the macroeconomic framework in the new draft of the Memorandum of Economic and Financial Policies (MEFP). The upcoming IMF country report, to be published after the disbursement of the $1.2 billion tranche, will detail all updated benchmarks and performance indicators, according to FBR sources.
The revised tax collection target is part of broader efforts to stabilize Pakistan’s economy while meeting IMF conditions, especially in the aftermath of natural disasters impacting fiscal revenue.
References
- ^ GDP growth (www.techjuice.pk)