ISLAMABAD: The International Monetary Fund (IMF) on Friday urged the Federal Board of Revenue (FBR) to swiftly resolve pending court cases, especially those related to super tax, as part of Pakistan’s broader fiscal reform commitments.
According to sources FBR is hopeful of recovering approximately Rs. 200 billion if key super tax cases are decided in its favor.
The recovery is considered crucial in bridging the growing revenue shortfall. During ongoing technical level talks, Pakistani officials informed the IMF delegation that the country has suffered an estimated Rs. 60 billion in tax losses due to recent floods.
In light of these losses, FBR authorities have requested some relief in the current tax collection target. However, the IMF delegation reportedly refrained from giving any final response on the relief request and instead emphasised the need to expand the tax net.
Sources caution that if the pending court decisions do not favor the FBR, alternative measures would be required to recover the Rs. 200 billion shortfall through other means.
As part of the briefing to the IMF, officials also discussed the formula for revenue distribution under the upcoming National Finance Commission (NFC) Award. It was conveyed that the provincial share in federal taxes based on population may be reduced from the current 82% under the new NFC framework.
In a fiscal development meeting, the Pakistani economic team briefed the IMF delegation on the targets achieved in the previous fiscal year. Talks between the IMF and various ministries, including the Power Division, are scheduled to continue today.
Officials from the Ministry of Finance expressed optimism about the successful conclusion of the negotiations, noting that the previous day’s briefing on economic performance was received positively by the IMF team.
