Pakistan and IMF Agree on Rs. 150 Billion Relief in Tax Collection Target

The Federal Board of Revenue (FBR) and the International Monetary Fund (IMF) have agreed to reduce Pakistan’s tax collection target by Rs. 150 billion, sources told ProPakistani. According to the revised framework, the annual tax target has been cut from Rs. 14.131 trillion to Rs. 13.981 trillion, marking a downward adjustment in the government’s fiscal outlook. Sources said the IMF has sought a globally verified damage assessment report to justify any further reduction in the tax target following the recent floods. The IMF negotiators said that Pakistan must achieve GDP growth of 3.5% and a tax-to-GDP ratio of 11% to stay on track. However, sources warned the economy is unlikely to meet the fiscal year GDP target of Rs. 129 trillion set for the current fiscal year. The FBR will now aim to achieve GDP growth of 3.5% and a tax-to-GDP ratio of 11% under the revised plan. However, officials noted that Pakistan may not be able to reach the GDP target of Rs. 129 trillion set for the current fiscal year. Sources further said that both sides have reached an agreement to revise the macroeconomic framework in the new draft of the Memorandum of Economic and Financial Policies (MEFP). The upcoming IMF country report, to be released following the disbursement of the $1.2 billion tranche, will include all updated benchmarks and performance indicators, according to FBR officials.