ISLAMABAD: The Federal Board of Revenue (FBR) and the International Monetary Fund (IMF) have reached an understanding to reduce Pakistan’s annual tax collection target by Rs150 billion, lowering it from Rs14.131 trillion to Rs13.981 trillion, amid revised economic projections and fiscal challenges.
According to official sources, the IMF has asked Pakistan to provide an internationally verified damage assessment report—particularly in the wake of recent floods—before considering any further downward adjustments to the revenue goal.
IMF officials emphasized that Pakistan must still aim for GDP growth of 3.5% and maintain a tax-to-GDP ratio of 11% to stay aligned with the ongoing bailout program. However, projections suggest the country may struggle to meet the GDP target of Rs129 trillion for the current fiscal year.
Both sides have agreed to update the macroeconomic framework in the revised draft of the Memorandum of Economic and Financial Policies (MEFP). The forthcoming IMF country report—set to be released following the disbursement of the $1.2 billion tranche—will include all updated fiscal benchmarks and performance indicators.
The tax target revision reflects Pakistan’s attempt to balance fiscal discipline with economic realities, particularly as flood-related damages continue to impact revenue collection and growth momentum.
