Pakistan’s Federal Board of Revenue (FBR) has assured the International Monetary Fund (IMF) that the Rs 605 billion tax revenue shortfall will be managed without introducing a mini-budget. The commitment was made as discussions between Pakistan and the IMF on economic policies and fiscal performance continue.
Government officials have presented a detailed plan to the IMF, outlining how the shortfall will be covered. The primary strategy involves settling long-pending tax cases to generate additional revenue. The authorities are optimistic that Pakistan will meet its tax collection target by June. If the target is not reached, the government will implement expenditure cuts to bridge the deficit.
Court Decisions to Aid Revenue Collection
A significant portion of the expected revenue depends on the upcoming Supreme Court ruling on the super tax. The FBR anticipates collecting Rs 157 billion through legal decisions. The Supreme Court’s verdict, scheduled for March 10, is expected to bring in Rs 57 billion. Additionally, Rs 100 billion is projected to come from a related High Court ruling.
Meanwhile, the government has already secured Rs 23 billion from the windfall profit tax imposed under Section 99D. Another Rs 72 billion has been collected from the advance deposit ratio in banks. These measures are part of broader efforts to close the tax gap without introducing new financial burdens.
Expedited Tax Dispute Resolutions
To further address the revenue shortfall, the government is pushing for a speedy resolution of pending tax disputes. Authorities have initiated an alternative system to fast-track these cases. The prime minister has assured full support to ensure quick settlements. Additionally, the Chief Justice of Pakistan has approved an expedited hearing process for these long-standing disputes.
Ongoing IMF Talks
Negotiations between Pakistan and the IMF entered their third consecutive day on Wednesday. Key topics under discussion include the energy sector’s performance, economic and social surveys by the Pakistan Bureau of Statistics, external financing needs, and overall budgetary figures.
The outcome of these discussions will play a crucial role in determining whether Pakistan secures the next tranche of funding under the IMF program. With fiscal challenges mounting, the government remains committed to meeting its revenue collection targets while maintaining economic stability.
