Pakistan, IMF Begin Key Talks on Revenue and Reforms

Pakistan and the International Monetary Fund (IMF) have started their second review talks on the ongoing loan program. The discussions are focused on missed tax targets, unresolved court cases, and urgent fiscal reforms. According to FBR officials, the IMF was briefed on key reasons for revenue shortfalls. The government blamed factors such as tax litigation and natural disasters like recent floods. Talks also covered the government’s request for more flexibility in revenue collection goals.

The IMF urged Pakistan to resolve major tax disputes, especially related to the super tax. The FBR said it could recover Rs200 billion if courts rule in its favor. However, if the rulings go against the FBR, alternative plans will be needed. Officials confirmed that the revenue shortfall plan includes pushing for quick verdicts in pending cases. The IMF has not yet agreed to relax targets but continues to press for broader tax reforms.

Government officials told the IMF that floods caused tax losses of nearly Rs60 billion. They asked for understanding due to the disaster’s economic impact. The IMF, however, remained focused on expanding the tax base rather than reducing targets. Sources said the FBR is working on enforcement steps to recover missing revenues. The talks are expected to continue with a detailed review of current strategies and possible new reforms.

The two sides also discussed the upcoming National Finance Commission (NFC) Award. Pakistan presented proposals to adjust the resource-sharing formula between provinces and the federal government. One idea involves reducing the current 82% provincial share to create fiscal space. The IMF delegation was also briefed on past fiscal targets during a meeting of the Fiscal Development Committee. These discussions aim to balance federal spending while maintaining provincial autonomy.

The next round of talks will focus on the power sector and key economic ministries. Finance Ministry officials said they remain hopeful for a positive outcome. They believe continued cooperation with the IMF is essential for stability. Both sides are working to close gaps between expectations and realities. Final decisions are expected after detailed technical reviews and policy commitments.