Pakistan’s tax-to-GDP ratio has exceeded the target set with the International Monetary Fund (IMF) for December 2024, with the Federal Board of Revenue (FBR) collecting Rs5,624 billion during the first half (July-December) of the current fiscal year.
The IMF had set a tax-to-GDP ratio target of 10.6 percent for the fiscal year 2024-25. However, by December 31, 2024, the ratio had already reached 10.8 percent.
According to official data provided to The News on Wednesday, the tax-to-GDP ratio was below the target at 9.5 percent in the first quarter (July-September), with GDP growth estimated at 0.92 percent. However, for the second quarter (October-December), GDP growth is projected to be around 2.57 percent. With the FBR’s tax collections totaling Rs5,624 billion, the tax-to-GDP ratio surpassed expectations, reaching 10.8 percent for the first half of the fiscal year.
In the previous fiscal year (2023-24), the tax-to-GDP ratio was 9.7 percent. As part of Pakistan’s commitment to secure the $7 billion Extended Fund Facility (EFF) from the IMF, the country agreed to increase this ratio to 10.6 percent for the fiscal year ending June 30, 2025.
Historically, Pakistan’s tax-to-GDP ratio has ranged from 8 to 9.5 percent over recent years. The IMF is now focused on annually increasing this ratio. As part of the FBR’s Transformation Plan, it is projected to rise to 13.5 percent in the medium term.
In December 2024, the FBR collected Rs1,328.1 billion against a target of Rs1,373 billion, achieving 96.7 percent of the set goal. Tax collections included Rs791.3 billion from income tax, Rs414.6 billion from sales tax, Rs69 billion from federal excise duty, and Rs122.8 billion from customs duty. After paying Rs70 billion in tax refunds, the net revenue collection amounted to Rs1,328.1 billion.
