Islamabad: The International Monetary Fund (IMF) has proposed setting a tax revenue target of over PKR 15 trillion for Pakistan’s federal budget for the upcoming fiscal year. The target, aimed at increasing the tax-to-GDP ratio to 13%, is currently under discussion in ongoing virtual negotiations between the government and IMF officials.
According to sources in the Ministry of Finance, the IMF is likely to introduce new conditions in the Memorandum of Economic and Financial Policies (MEFP) as part of the staff-level agreement for the release of the next $1 billion tranche. These discussions also include measures to curb tax evasion and enhance revenue collection.
Pakistan is expected to face strict financial benchmarks in the next fiscal year, including ambitious revenue targets and structural reforms. Additionally, the government aims to collect PKR 2.745 trillion in non-tax revenue as part of its broader fiscal strategy.
Economic growth is projected to exceed 4% in the next fiscal year, according to ministry sources. Meanwhile, the IMF has approved the collection of PKR 1.257 trillion from banks to help address the issue of circular debt in the power sector.
The final tax target and other financial commitments are expected to be finalized before the new budget is presented.
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