FBR Eyes Rs. 200 Billion Recovery as Super Tax Case Verdict Nears

As talks with the International Monetary Fund (IMF) continue, Pakistan has presented a comprehensive plan to address its revenue shortfall, banking on a potential Rs. 200 billion recovery if pending super tax cases are decided in the Federal Board of Revenue’s (FBR) favor. According to FBR sources, a decision on the super tax cases is expected by the end of September or early October. If the verdict supports the FBR, authorities plan to immediately recover the amount to bridge the revenue gap. However, if the decision goes against the FBR, additional measures worth Rs. 180-200 billion will be required, officials briefed the IMF. The FBR also informed the IMF that initial estimates suggest tax losses of Rs. 55-60 billion due to recent floods. Pakistan has requested some relief in its tax targets from the IMF, but no final response has been received yet. Enforcement actions and the possible introduction of a flood levy are under consideration to boost revenues. The IMF, meanwhile, has urged Pakistan to broaden its tax base, noting that the country’s tax rates are already higher than those in the region. Briefings also covered the National Finance Commission (NFC) process and fiscal development. Officials proposed reducing the provinces’ share in the new NFC Award from the current 82% (based on population) and decided to transfer the Benazir Income Support Programme to the provinces, emphasizing the need for provinces to increase their own revenues. President of Pakistan has appointed the Finance Minister as chairman of the 11th NFC Award. Last fiscal year, government expenditures reached a record 21.4% of GDP, compared to 19.5% in 2023-24, with the fiscal deficit exceeding Rs. 6.1 trillion.