The government of Pakistan Tehreek-i-Insaaf (PTI) needs to brace itself because of the forthcoming economic challenges in the current fiscal year. Despite vehement criticism of PTI’s economic policies, the ousting of former Finance Minister Asad Umer, and the injection of foreign money into the economy, Pakistan is still a long way away from financial and economic stability. This is primarily because the policies are impacting the average consumer in Pakistan, bringing down the purchasing power significantly, along with the hurdles for businesses and industries that are operating in insecure environments and the resistance to any change to streamline finances in the system is helping build a narrative against the government.

At this point, in the last 15 months, the state has witnessed an increase in the debt acquisition limits. In 2018, the debt liabilities stood at Rs29.879 trillion as opposed to Rs 41.489 trillion in September 2019. The government’s various efforts to inject money into the economy have helped sustain Pakistan in the last year, however, innovative solutions are required to fulfill these gaps in the economy. The Ministry of Finance believes that these hindrances are due to one-off situations that they may be able to resolve, however, there are factors in the process of revenue collection that they cannot control. These include the increase in domestic interest rates, exchange rate depreciation, legal constraints on revenue collection, and the overall slowing down of the Pakistani economy - because businesses and industries are incurring losses and do not feel favoured by the government.

Revenue collection is also not in line with the targets set by the government. There is a shortfall of Rs 387 billion in the last seven months. While the FBR aims to collect Rs 3-5 billion in book adjustments, the country still has a long way to go before it can meet its targets. Custom tax, income tax collection, sales tax, and federal excise duty all incurred a shortfall. The revenue collection this year is certainly an improvement from the last but it fails to meet the targets set by the government itself. As a result, the International Monetary Fund (IMF) has also brought down the annual revenue collection to Rs 5.27 trillion. These readjustments are necessary but with so much reshuffling and uncertainty in the government, steady action is needed to overcome these challenges. The government has reshuffled the top tax officers of customs, however, the increase in tax collection is not guaranteed due to the conditions of the Pakistani economy. FBR Chairman Shabbar Zaidi is also allegedly unable to lead the body due to differences. With such issues at play, it is important for the government to set the right targets, address the issues of the masses and the local industry, along with the appointment of experienced personnel that can help deliver on the promises of the government.