By Ali Imran
ISLAMABAD: The Federal Board of Revenue (FBR) has set a target to increase the tax-to-GDP ratio to 11.2% for the upcoming fiscal year, media reported citing sources.
According to sources, virtual discussions are held between Pakistan and the International Monetary Fund (IMF) as preparations for the budget are underway. The FBR’s target will be determined based on the estimated GDP size for the next fiscal year. For the current fiscal year, a tax-to-GDP ratio of 10.6% is expected to be achieved, with the ratio already reaching approximately 10.8%, sources added.
Sources revealed that an agreement has been reached to raise the tax-to-GDP ratio by more than 0.5% for the next fiscal year. For the fiscal year 2025-26, the FBR’s target will also be set based on the projected GDP size.
Under the loan program, the tax-to-GDP ratio is planned to reach 13% over the next two years, with a gradual annual increase, FBR sources stated.
Virtual meetings with the IMF are focusing on budget targets, and the second installment of the loan program will be approved by the IMF Executive Board once budget proposals are finalized. However, concerns remain about a potential shortfall in the revised tax collection target of Rs12,300 billion for the current fiscal year, sources added.
It is worth mentioning here that a Pakistani delegation, led by Finance Minister Muhammad Aurang-zeb, will arrive in Washington on April 20 to participate in the meetings of the International Monetary Fund (IMF) and the World Bank.
As per details, the delegation, which includes the Governor of the State Bank of Pakistan and other senior officials, will engage in discussions with IMF and World Bank representatives during the meet-ings, scheduled from April 21 to 26.
According to diplomatic sources, the finance minister will hold meetings with officials from the U.S. State Department, members of Congress, and potential investors. Arrangements have also been made for off-the-record discussions with US media.
