Pakistan, IMF move toward lower FBR tax goal for FY26
“Pakistan and the IMF are nearing agreement on a lower tax collection target for the FBR as revenue pressures persist.”
Key points
- Pakistan and the IMF are nearing agreement on a lower tax collection target for the FBR as revenue pressures persist.
- The move is part of broader efforts to recalibrate fiscal projections under the IMF programme.
Pakistan and the International Monetary Fund are close to agreeing on a revised fiscal framework for the current year, under which the Federal Board of Revenue's collection target would be reduced to about Rs13.45 trillion. The expected revision comes as Islamabad and the lender continue virtual talks under the $7 billion Extended Fund Facility.
According to the report, the FBR has struggled to remain on track against the original tax-to-GDP objective and has posted a sizeable shortfall during the first eight months of the fiscal year. Officials are now working on updated projections that place the tax-to-GDP ratio around 10.6% by June 2026, below the earlier IMF-linked benchmark.
The government is also expected to make adjustments on the expenditure side to remain aligned with programme commitments. The broader talks are taking place against the backdrop of inflation risks, costlier fuel and a more difficult external environment due to the ongoing Middle East conflict.
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