Pakistan achieves IMF-set tax targets for FY2024-25

ISLAMABAD: Pakistan has successfully achieved the key tax targets set by the International Monetary Fund (IMF), ARY News reported on Friday.

Pakistan achieved a tax-to-GDP ratio of 10.8%, exceeding the target of 10.6pc for the ongoing fiscal year, which will pave the way for Islamabad to get second tranche of the loan programme.

Exclusively talking to ARY News, Finance Adviser Khurram Shehzad highlighted that Pakistan’s achievement represents the highest half-yearly tax-to-GDP ratio in the past four years. During the first half of the fiscal year, tax collection reached 94% of the targeted Rs6009 billion, he added.

The Federal Board of Revenue (FBR) officials confirmed that the IMF is satisfied with the progress, eliminating the immediate need for additional tax measures to meet the annual targets. Between July and December, Rs5,624 billion were collected in taxes, marking a 26% increase compared to the previous year and a 35% rise in December alone.

Despite Rs385 billion shortfall in the half-yearly target, significant improvement was noted in tax revenues in Pakistan. The annual tax collection goal is Rs12,970 billion, and officials are confident of meeting this target without introducing a mini-budget.

To cover the shortfall, Rs7,346 billion is projected to be collected in the second half of the fiscal year, the FBR officials stated.

Additionally, Rs70 billion in tax refunds were processed during the first six months.

Breakdown of collections includes Rs2,827 billion from income tax, Rs617.3 billion from customs duties, Rs346.6 billion from federal excise duties, and Rs2,105 billion from sales tax during the July-December period.