IMF proposes over Rs15 trillion tax target for Pakistan’s next budget

ISLAMABAD: The International Monetary Fund (IMF) has proposed that Pakistan set a tax collection target of over Rs15 trillion for the upcoming fiscal year.

The sources revealed that virtual discussions between the IMF and Pakistan are ongoing, with about 85 per cent of the talks having been successfully completed. These discussions aim to finalise details of the next budget, which is likely to be presented in the National Assembly soon.

According to ARY News, as per the proposed budget, the government plans to raise the tax-to-GDP ratio to 13 per cent, alongside generating Rs2,745 billion in non-tax revenue. It is also anticipated that Pakistan’s economy will grow by over 4 per cent in the next financial year, spurred by increased investment and domestic consumption.

In a prior development, the IMF advised Pakistan’s Special Investment Facilitation Council (SIFC) against offering tax exemptions for international investment projects, including the Chaghi-Gwadar railway track, which is valued at $2 billion.

Sources also indicated that the IMF believes granting such tax exemptions would negatively affect Pakistan’s revenue potential. Pakistan had sought investment from Gulf countries for the railway project, but the IMF’s stance remains firm against providing tax breaks for international investors via the SIFC.

During discussions, officials briefed the IMF delegation that the SIFC is actively promoting investment, particularly by facilitating the transport of minerals from Reko Diq to Gwadar through the proposed railway line.

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