ISLAMABAD: The Pakistan government, in consultation with the IMF (International Monetary Fund), has set a tax-to-GDP target of 11.2% for the upcoming financial year 2025-26.
According to FBR (Federal Board of Revenue) sources, the target for the upcoming fiscal year would be set by estimating the size of the GDP (gross domestic product). An agreement has been reached with the IMF in this regard, they added.
The sources said that current fiscal year’s tax-to-GDP target had been fixed at 10.6%. It has been agreed to increase this by around 0.5% for the upcoming fiscal year. Keeping that in mind, the target has been upped for the 2025–26 fiscal year, they continued.
They stated that the tax-to-GDP ratio has already reached around 10.8% during the current fiscal year. This ratio will be gradually increased to 13% on an annual basis.
FBR sources said that virtual discussions have been going on with the IMF regarding budget targets. The second tranche under the loan programme would be approved by the IMF Executive Board once the budget proposals were finalized, they concluded.
