Achieving Rs. 14.3 Trillion Tax Target Impossible: FBR

The International Monetary Fund (IMF) has agreed in principle to reduce Pakistan’s tax revenue target by up to Rs. 250 billion, as the Federal Board of Revenue (FBR) says it is impossible to meet the originally proposed target due to low inflation and a downward revision in the economic growth outlook, official sources told ProPakistani. The FBR’s revised tax collection target for fiscal year 2025-26 is now expected to be fixed at Rs. 14,100 billion, slightly lower than the earlier proposed figure of Rs. 14,307 billion. Final negotiations between the IMF mission and Pakistan’s economic team on tax targets, next fiscal year’s economic agenda, and the upcoming federal budget are scheduled for today. Sources said that Pakistan’s economic team has argued that both inflation and GDP growth forecasts are lower than earlier projections, making the previous tax target unfeasible. In response, the government has committed to curbing federal expenditures and boosting revenues through higher non-tax income. Additionally, the upcoming budget is expected to include special relief for low-income earners. Talks are underway to finalize an income tax exemption for individuals earning up to Rs. 1 million annually. Incomes exceeding that threshold, however, may be brought under new tax measures to address revenue shortfalls. Sources expect today’s discussions between the IMF and the government’s economic team to be crucial for concluding the final terms of the fiscal framework for the 2025-26 budget.