Pakistan has surpassed key tax revenue targets set by the International Monetary Fund (IMF), achieving a tax-to-GDP ratio of 10.8%—above the target of 10.6%—for the ongoing fiscal year. This achievement positions Pakistan to secure the second tranche of the IMF loan program.
Speaking on the development, Finance Adviser Khurram Shehzad highlighted that this milestone represents the highest half-yearly tax-to-GDP ratio in four years. He further stated that Pakistan’s tax collection during the first half of the fiscal year reached 94% of the targeted Rs6,009 billion.
Officials from the Federal Board of Revenue (FBR) confirmed that the IMF has expressed satisfaction with Pakistan’s progress, removing the immediate requirement for new tax measures to meet annual revenue targets. Between July and December, Pakistan collected Rs5,624 billion in taxes—a 26% increase compared to the same period last year, with December showing a notable 35% rise.
Despite a shortfall of Rs385 billion in the half-yearly target, officials remain optimistic about achieving the annual tax revenue goal of Rs12,970 billion without the need for a mini-budget. To meet this target, Rs7,346 billion will need to be collected in the second half of the fiscal year.
The breakdown of tax collections for the July-December period is as follows:
Income tax: Rs2,827 billion
Sales tax: Rs2,105 billion
Customs duties: Rs617.3 billion
Federal excise duties: Rs346.6 billion
Additionally, Rs70 billion in tax refunds were processed in the first six months, further demonstrating progress in improving Pakistan’s tax administration.
This development comes amid ongoing reforms in various sectors, including the government’s privatization plans for Pakistan International Airlines (PIA), which were also approved by the IMF. With continued focus on revenue generation, Pakistan is on track to meet its fiscal targets, fostering confidence in the nation’s financial management and economic stability.
