Pakistan, and IMF Agree to Revised Tax Target and $1.2 Billion Tranche

International Monetary Fund (IMF) and the Government of Pakistan have agreed to revise key economic indicators, as the critical phase of their discussion and ongoing partnership concluded.

Official sources have confirmed that both stakeholders, i.e., Government of Pakistan and IMF, have finalized the new draft of Memorandum of Economic and Financial Policies (MEFP) wherein, the tax collection target for Pakistan, for the current fiscal year has been set at Rs. 150 Billion.  Moreover, Federal Board of Revenue (FBR) has also revised its target and set it to Rs13.981 trillion lowering it from the previous target of Rs14.131 trillion.

Notably, these adjustments in tax collection targets have been made in light of the current economic realities, and the various underlying reasons such as: slower revenue growth, prioritizing post-flood recovery efforts, while maintaining overall fiscal discipline.

Now under the revised framework, Pakistan is now projected to achieve a GDP growth rate of 3.5% and a tax-to-GDP ratio of 11%. The successful conclusion of the agreement between International Monetary Fund (IMF) and the Government of Pakistan paves the way for the imminent disbursement of the next $1.2 billion IMF tranche, offering crucial support to the nation’s economy.