The global lender has called for stronger revenue collection as Pakistan faces pressure to meet its annual tax target of Rs15.264 trillion.
ISLAMABAD: The International Monetary Fund (IMF) has expressed concern over Pakistan’s tax revenue shortfall and proposed stronger measures to help the government achieve its annual collection target of Rs15.264 trillion.
The concerns come as Pakistan struggles to meet its revenue commitments under the $7 billion IMF programme. The lender has reportedly highlighted a tax shortfall of Rs129 billion in October and Rs96 billion over the first four months, raising questions about the pace of revenue collection.
The IMF has stressed the need to increase the country’s tax-to-GDP ratio, describing existing tax revenues as insufficient. It has also called for broader tax coverage and improved collection at both federal and provincial levels.
One of the proposed areas of focus is increasing revenue through the General Sales Tax (GST). The expansion of the tax base is also expected to involve sectors such as retail, wholesale and agriculture, particularly ahead of preparations for the next federal budget.
The lender has further emphasised bringing professionals and other sectors currently outside the tax system into the tax net. Stronger enforcement and improved compliance are considered important to achieving the agreed revenue targets.
Meanwhile, Federal Board of Revenue (FBR) sources have indicated that if the shortfall increases further, the government may consider imposing additional taxes or reducing public expenditure. These options are under consideration and do not represent confirmed new tax measures.
The IMF may also seek stricter revenue-related conditions during upcoming economic reviews. Pakistan is required to meet the commitments agreed under its $7 billion financing programme.
The latest concerns highlight the continuing challenge of increasing tax collection while broadening the tax base. The government’s progress in meeting revenue targets will remain an important issue in its discussions with the IMF.
