Pakistan informed the International Monetary Fund (IMF) that it will likely miss its Rs3.1 trillion tax collection target for the July–September quarter, with authorities projecting actual revenue below Rs2.95 trillion, The Express Tribune reported.
The Federal Board of Revenue (FBR) briefed the IMF on revenue shortfalls, attributing the gap to flood-related disruptions, slower economic activity, and declining electricity demand, while expressing hope that increased inflation, higher economic growth, and greater imports of solar panels could partly offset the deficit.
The discussions took place as part of ongoing talks for the release of a $1 billion loan tranche under the Extended Fund Facility (EFF) and $220 million under the Resilience and Sustainability Facility (RSF).
During the briefing, the IMF also inquired about the FBR’s revenue projections, the impact of floods on collection, and measures to improve compliance. Officials highlighted that last fiscal year’s shortfall of over Rs1.2 trillion could serve as a cautionary precedent.
Customs authorities reported that despite a reduction in regulatory duties, import tax collection increased 16 percent during the first two months of the fiscal year, while overall imports rose 9 percent in dollar terms.
The FBR also projects around Rs190 billion in additional revenue through enforcement measures and expects a 10% tax on solar panel imports from erstwhile FATA to contribute further, with Rs6 billion collected in the first two months against an Rs18 billion projection.
The IMF was also briefed on the Rs1.25 trillion circular debt settlement in the power sector financed through bank borrowings. However, the FBR expressed concerns over potential revenue losses from falling electricity demand due to higher prices, economic slowdown, and policy reforms driven by IMF, World Bank, and Energy Ministry recommendations.
