IMF Warns Pakistan of Rs 400 B Tax Shortfall as Growth Target Revised
The International Monetary Fund (IMF) warns Pakistan about a Rs 400 billion tax shortfall this fiscal year. The Fund advises the government to cut spending, but officials insist that many expenses remain rigid.
The Federal Board of Revenue (FBR) promises to meet its Rs 14.13 trillion tax target despite missing early goals. However, the IMF considers this target unrealistic without structural reforms.
Pakistan requests the IMF to lower the GDP growth estimate from 4.2 % to around 3.5 %. Inflation, meanwhile, may stay between 7 % and 8 %, creating pressure on households and businesses.
Key Issues in Talks
The IMF urges Pakistan to impose new taxes on fertilizer and pesticides to cover part of the shortfall. However, the government seeks to postpone these levies until next year to protect farmers and consumers.
Negotiations continue over the Memorandum of Economic and Financial Policies (MEFP). Both sides aim to finalize the document, but differences persist over projections and assumptions. Without consensus, talks could extend further.
Pakistan also updates its flood damage estimates, revising the loss figure from Rs 371 billion to over Rs 650 billion. The IMF notes that post-disaster spending adds stress to fiscal planning.
In addition, the Fund warns that any surge in global commodity prices or renewed regional tensions could worsen economic stability. The government now focuses on balancing reform needs with growth priorities.
