Exceeding IMF Expectations
In a significant fiscal achievement, Pakistan has met and exceeded the tax targets set by the International Monetary Fund (IMF) for FY 2024-25. The tax-to-GDP ratio reached 10.8%, surpassing the 10.6% benchmark. This success bolsters Pakistan’s eligibility for the next tranche of the IMF loan program.
Impressive Half-Yearly Growth
Tax collection during the first half of the fiscal year amounted to Rs5,624 billion, representing 94% of the Rs6,009 billion target. Finance Adviser Khurram Shehzad highlighted that this marks the highest half-yearly tax-to-GDP ratio in four years. A 26% year-on-year increase in collections was recorded, with December seeing a 35% boost.
Path to Annual Targets
The Federal Board of Revenue (FBR) is optimistic about meeting the annual target of Rs12,970 billion. The IMF’s satisfaction with the current progress has dispelled the need for additional tax measures or a mini-budget. Rs7,346 billion is projected to be collected in the second half of the fiscal year.
Breakdown of Tax Revenues
- Income Tax: Rs2,827 billion
- Sales Tax: Rs2,105 billion
- Customs Duties: Rs617.3 billion
- Federal Excise Duties: Rs346.6 billion
Transparency and Efficiency
The processing of Rs70 billion in tax refunds during the first six months underscores a commitment to transparency and improved efficiency within the tax system.
A Strengthened Fiscal Outlook
With IMF approval and robust tax growth, Pakistan has set a strong foundation for sustained economic reform and financial stability.
