Pakistan Fails To Meet Tax Collection Target, Shortfall Widens To PKR 606 Billion In July-Feb: Report

The IMF's $7 billion loan to Pak came with strict conditions, but the Federal Board of Revenue reportedly logged a huge shortfall of PKR 606 billion in July-Feb against the target of PKR 7.95 trillion

As part of its conditions, the IMF compelled Pakistan to impose new taxes, majorly targeting the salaried class and almost all consumable goods such as milk, vegetables, medical tests, etc. 

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Pakistan reportedly failed to meet the tax collection targets set by the International Monetary Fund (IMF) in the first eight months of the current fiscal year. The Express Tribune reported that the country's tax shortfall expanded to touch Pakistani Rupee (PKR) 606 billion (Rs 189.45 billion) in the July-February period in the current fiscal year. This escalation has ended up in adding more pressure on the government for violating commitments made with the IMF, the news agency said.

The Federal Board of Revenue (FBR) incurred a massive shortfall of PKR 606 billion in comparison to the July-February target of PKR 7.95 trillion, reported PTI citing the Pakistani news agency. The IMF provided a loan worth $7 billion to Pakistan, however, it came with strict conditions, including on tax collection.

The authorities pooled PKR 7.342 trillion in the period under review in the current fiscal year, however, failed to meet the target of PKR 7.95 trillion, set by the IMF.

The report noted that the Pakistan government failed to meet the monthly target of PKR 983 billion in February and collected only PKR 845 billion, missing PKR 138 billion in the month. This also marked the seventh consecutive month of failed targets.

As part of its conditions, the IMF compelled Pakistan to impose new taxes, majorly targeting the salaried class and almost all consumable goods such as milk, vegetables, medical tests, etc. 

World Bank To Partner With Pakistan For $20 Billion Development Plan

Further, the Pakistani media agency also reported that the World Bank on Friday said that economic stabilisation is ‘taking hold’ in Pakistan. This presents an opportunity for the authorities to ink a 10-year development plan. The plan will focus $20 billion in development lending to the nation under the new Country Partnership Framework announced last month.

The global lender will direct funding towards clean energy and climate resilience in the Asian economy from 2026 onwards. Sharing the details in a video on social media platform X, Najy Benhassine, the World Bank’s Country Director for Pakistan, said, “This is an important moment for the partnership between the World Bank Group and Pakistan as we engage on this journey at a particular moment for Pakistan where stabilisation is taking hold and there are new ambitions and new plans for development on the long term that are very aligned with the priorities of the World Bank Group in the country. This is a groundbreaking joint commitment with the government of Pakistan both at the federal and provincial level to commit to focus on six of the most acute development challenges that the country is facing.”