IMF Questions Pakistan on Tax Shortfall and Pending Court Cases

IMF presses Pakistan over tax shortfall, pending court cases

The IMF has raised concerns about Pakistan’s revenue performance, questioning why tax collections continue to lag targets and why so much of the government’s fiscal plan depends on court decisions.

The Federal Board of Revenue collected about Rs 11.7 trillion this year, more than a trillion rupees short of its Rs 13 trillion goal. Officials blamed weaker growth and lower inflation, which cut into sales tax and other revenue streams.

Adding to IMF worries, Pakistan is banking on around Rs 170 billion stuck in legal disputes, including the “super tax” on major sectors. Those cases are still pending before the Supreme Court, and the timing or outcome is far from certain.

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IMF negotiators warned that relying on litigation makes Pakistan’s fiscal math fragile. With the second review of the bailout program underway and a $1 billion tranche on the line, the Fund wants more reliable, structural reforms rather than revenue promises tied to court verdicts.

For Islamabad, the message is clear: strengthen tax enforcement and broaden the base, or risk credibility with its biggest lender.