Pakistan has exceeded the key tax revenue targets set by the International Monetary Fund (IMF), achieving a tax-to-GDP ratio of 10.8% for the current fiscal year, surpassing the target of 10.6%. This accomplishment positions Pakistan to receive the second tranche of the IMF loan program.
Finance Adviser Khurram Shehzad emphasized that this milestone marks the highest half-yearly tax-to-GDP ratio in four years. He also noted that Pakistan’s tax collection in the first half of the fiscal year reached 94% of the targeted Rs6,009 billion.
Officials from the Federal Board of Revenue (FBR) confirmed that the IMF is satisfied with Pakistan’s progress, removing the immediate need for new tax measures to meet the annual revenue targets. From July to December, Pakistan collected Rs5,624 billion in taxes—a 26% increase compared to the same period last year, with December alone showing a remarkable 35% rise.
Despite a Rs385 billion shortfall in the half-yearly target, officials are optimistic about reaching the annual tax revenue goal of Rs12,970 billion without the need for a mini-budget. To meet this goal, Rs7,346 billion will need to be collected in the second half of the fiscal year.
The breakdown of tax collections for the July-December period is as follows:
- Income tax: Rs2,827 billion
- Sales tax: Rs2,105 billion
- Customs duties: Rs617.3 billion
- Federal excise duties: Rs346.6 billion
Additionally, Rs70 billion in tax refunds were processed in the first six months, further highlighting improvements in Pakistan’s tax administration.
This development coincides with ongoing reforms across various sectors, including the government’s privatization plans for Pakistan International Airlines (PIA), which have also been approved by the IMF. With a continued focus on revenue generation, Pakistan is on track to meet its fiscal targets, reinforcing confidence in the country’s financial management and economic stability.
