ISLAMABAD - Pakistan and the International Monetary Fund (IMF) have agreed that neither mini budget would be introduced nor additional tax would be imposed on oil products to achieve the annual tax collection target during the current fiscal year.
The government has assured the visiting delegation that the Federal Board of Revenue (FBR) would achieve the annual tax collection target without new tax measures. It has been decided that neither mini budget would be introduced nor General Sales Tax (GST) would be imposed on oil products.
The Fund’s staff is currently visiting Pakistan to discuss recent developments and Extended Fund Facility (EFF) programme performance to date. This mission was not part of the first review under the $7 billion EFF, which will be no earlier than the first quarter of 2025. The mission is also holding separate technical sessions with all the stakeholders, including the FBR, Power and Petroleum Divisions and the energy sector regulatory authorities. The talks are expected to complete on November 15.
The first formal review has to take place based on the end-December performance for Pakistan to qualify for disbursement for a second instalment of over $1bn by March 15, 2025.
An official of the Ministry of Finance informed the IMF has shown satisfaction over Pakistan’s recent economic performance, particularly the increase in the tax-to-GDP ratio, which has risen from 8.8 percent to 10.3 percent—a 1.5 percent improvement seen as a positive indicator of Pakistan’s fiscal policies.
The FBR further revealed that tax collection on agricultural income is set to begin next year, signalling an effort to broaden the tax net and sustain revenue generation in the longer term.