No mini-budget to bridge tax gaps, govt assures IMF
ISLAMABAD – Pakistan has assured the International Monetary Fund (IMF) that there would be no need to introduce mini budget to bridge the tax collection shortfall during the ongoing fiscal year, which would be covered through the settlement of pending tax cases and other administrative measures.
The talks between Pakistan and IMF continued for the fourth consecutive day on Thursday for the first biannual review of Pakistan’s $7 billion Extended Fund Facility (EFF). The IMF delegation, led by Nathan Porter, had arrived Pakistan on almost two weeks visit to review the economic situation of the coun-try. Pakistan would receive $1.1 billion after satisfying the IMF delegation on economic situation during the first half (July to December) of the current fiscal year.
The major concern for the federal government on economic front is massive shortfall of Rs601 billion in tax collection. The FBR has collected Rs7,346 billion during the first eight months (July-February) 2024-25 against the assigned target of Rs7,947 billion, reflecting a shortfall of Rs601 billion. The government would request the Fund to downward revise the annual tax collection target for the current fiscal year.
The government has assured the Fund that the tax shortfall of Rs601 billion will be addressed without the need for a mini-budget. A plan has shared with the IMF, under which the shortfall will be met through the settlement of pending tax cases. The government is eying on pending court cases related to the tax matters and taxes from retailers. Various cases regarding super tax are pending the courts.
The government has informed the Fund that the FBR has collected Rs23 billion under the windfall prof-it tax imposed through Section 99D and Rs 72 billion from the advance deposit ratio in banks.
According to the reports, the IMF has projected a downward revision in the FBR’s revenue collection target and assessed that the tax machinery could only fetch Rs12,480 billion, a potential shortfall of Rs490 billion. The government had set ambitious revenue target of Rs12.913 trillion for current fiscal year FY25, which is 40 percent more than the last fiscal year FY24.
