The International Monetary Fund (IMF) has raised serious concerns after Pakistan failed to meet its annual tax collection target. The government collected Rs11.74 trillion last fiscal year — well below the Rs12.97 trillion goal. The issue came up during the second round of economic review talks between Pakistani officials and the IMF in Islamabad.
The Federal Board of Revenue (FBR) blamed several factors for the shortfall. These included economic slowdown, falling inflation, and devastating floods. Officials also pointed to over Rs250 billion stuck in unresolved tax court cases. They warned the current quarter’s target is also at risk unless daily tax collection reaches Rs140 billion.
Read more: IMF urges FBR to address tax shortfalls amid ongoing review talks
Despite the setback, officials shared some positive news. Pakistan recorded a Rs2.4 trillion primary surplus — the highest in 24 years. The fiscal deficit stayed at 5.4% of GDP, better than expected. Income tax filer numbers also grew to 7.7 million, showing slow but steady expansion in the tax base.
However, the provinces also missed their surplus targets. They fell short by Rs280 billion, worsening the revenue gap. The finance ministry told the IMF that a new National Finance Commission (NFC) meeting will soon be held to improve provincial coordination and financial responsibility.
Read more: IMF backs Pakistan flood relief with Rs1.2 trillion deal
The IMF now expects faster reforms from Pakistan. With quarterly targets looming, the government is preparing an alternative revenue plan. FBR officials also updated the IMF on new tax legislation and compliance efforts. Talks will continue as the IMF team reviews data and assesses Pakistan’s economic performance going forward.