Pakistan held its second round of economic review talks with IMF presenting detailed figures on revenue shortfalls, tax collection, and fiscal performance.
The IMF expressed concern over Pakistan missing the annual tax target of Rs12.97 trillion, as the Federal Board of Revenue managed Rs11.74 trillion only.
Officials explained that sluggish economic activity, devastating floods, weak real estate performance, and delays in court cases contributed to the shortfall in revenue collection.
Over Rs250 billion worth of tax cases remain stuck in litigation, while meeting the quarterly revenue goal would require collecting Rs140 billion daily.
The FBR highlighted that the tax-to-GDP ratio target of 10.5 percent was missed, with only a modest 1.4 percent increase achieved.
Authorities admitted non-tax revenues also declined, citing reduced profits from the SBP, lower petroleum levy receipts, and weakening performance of other institutions.
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Despite these setbacks, officials underlined progress, noting the highest primary surplus in 24 years of Rs2.4 trillion and fiscal deficit restricted to 5.4 percent.
The number of tax filers increased from seven million to 7.7 million, showing signs of an expanding base despite continuing revenue challenges.
The IMF was informed that provinces fell short of their surplus targets by Rs280 billion, further straining fiscal consolidation and complicating economic stabilization efforts.
Officials assured the Fund that restructuring of the National Finance Commission was underway, with a meeting planned in consultation with provinces to move forward.
Talks also covered tax reforms and compliance measures, with FBR representatives briefing on new legislation intended to broaden the tax net and strengthen enforcement.
An alternative revenue plan is being prepared to address possible gaps, as the IMF pressed for urgent measures to stabilize Pakistan’s fragile financial position.