Finance Minister Muhammad Aurangzeb expressed optimism on Thursday that Pakistan’s program with the International Monetary Fund (IMF) would continue, despite a significant shortfall in tax collection. He avoided confirming whether the government would introduce a new mini-budget or renegotiate the annual tax target, which now faces considerable challenges.
At a press conference, Aurangzeb highlighted measures being taken to broaden the tax base, but acknowledged the difficulty in meeting the Federal Board of Revenue’s (FBR) Rs1.37 trillion monthly tax target. By Thursday, the FBR had only achieved half the target, leaving a gap of over Rs1 trillion with just five days left in the month.
Also Read: Finance Minister: Tax-to-GDP Ratio to Hit 13% in Three Years
The finance minister assured that discussions with the IMF would be conducted in good faith, and the government remained committed to its pledges. “I am hopeful that the IMF program will continue,” Aurangzeb said, emphasizing that the government was not backing away from any commitments made to the IMF.
The FBR’s annual target of Rs13 trillion has become increasingly difficult to achieve due to the tax collection shortfall. Aurangzeb noted that the ambitious 40% growth target for this year, compared to last year’s 29%, had not been met, citing faulty economic assumptions.
FBR Chairman Rashid Langrial provided further details on the enforcement measures aimed at wealthy individuals. Notices were sent to top income earners, but only one in five responded. This reflects the ongoing struggle to collect adequate taxes from high-income individuals, with a significant tax gap of Rs7.1 trillion expected this fiscal year.
