Islamabad (The COW News Digital) The International Monetary Fund (IMF) has expressed concern over Pakistan’s growing tax revenue shortfall and proposed emergency taxation measures to help the government meet its annual revenue collection target of Rs15,264 billion.
According to sources, the global lender has raised concerns over a revenue gap of Rs129 billion recorded in October and a cumulative shortfall of Rs96 billion during the first four months of the current fiscal year.
The IMF has stressed the need for Pakistan to achieve its annual tax collection target, describing the existing revenue performance as insufficient. It has also called for an increase in the country’s tax-to-GDP ratio to strengthen public finances and improve revenue generation.
Sources within the Federal Board of Revenue (FBR) said that if the tax shortfall continues to widen, the government may consider imposing additional taxes on the public or reducing government expenditure to bridge the gap.
The possibility of emergency taxation measures could also be discussed during upcoming economic reviews, particularly if revenue targets remain unmet.
According to the sources, the IMF may introduce stricter revenue-related conditions during future assessments of Pakistan’s economic programme. The lender is reportedly emphasising the importance of meeting agreed fiscal targets under the country’s $7 billion loan programme.
The IMF has also identified the need to increase revenue collection through General Sales Tax (GST) at both federal and provincial levels. Improving tax compliance and expanding the revenue base are considered important steps towards addressing Pakistan’s fiscal challenges.
Sources said the lender has proposed making progress in bringing the retail, wholesale and agricultural sectors into the tax system before the preparation of the next federal budget.
The IMF has further stressed that professionals and other sectors currently outside the tax net should be brought into the formal taxation system.
These proposals are aimed at broadening the tax base rather than relying solely on existing taxpayers to generate additional revenue. The move could potentially increase government receipts from sectors that have historically remained under-taxed or outside the formal tax framework.
The sources added that the IMF may tighten revenue-related conditions for the next fiscal year, depending on Pakistan’s performance during the ongoing programme reviews.
The government’s ability to meet the annual tax target is expected to remain a key factor in discussions with the international lender.
FBR officials are reportedly monitoring revenue collection trends, while the government may have to consider additional fiscal measures if the gap between actual receipts and the target continues to increase.
The proposed measures could include new taxation, expenditure reductions and enhanced enforcement efforts, although no final decision has been confirmed in the information provided.
Pakistan is currently operating under a $7 billion IMF programme, which requires the country to meet several fiscal and economic commitments.
The latest concerns over tax collection highlight the challenges facing the government in achieving its revenue targets while maintaining economic stability.
Further discussions during upcoming IMF reviews are expected to determine whether additional taxation or spending adjustments will be required to address the shortfall.
