Every 6th tax rupee in Pakistan consumed by ailing SOEs

February 14, 2026 (MLN): The federal government’s fiscal health is under increasing strain as a new report reveals that for every Rs6 collected in taxes, Rs1 is being funnelled back into State-Owned Enterprises (SOEs).

The Annual Aggregate Report for FY2025 painted a sobering picture of value destruction, showing that net adjusted losses for the SOE portfolio plummeted from Rs30.6 billion in FY2024 to a staggering Rs122.9 billion in FY2025.

While SOEs contributed Rs2,119.2 billion to the national exchequer through taxes and dividends, the government’s "Net Fiscal Flow", the actual cash benefit after accounting for subsidies, loans, and equity injections, evaporated by 91%.

This surplus dropped from Rs458.2 billion to a mere Rs40.7 billion, leaving the sector at a "fiscal breakeven" point where for every Rs1 of support, the state receives only Rs1.01 in return.

The report highlights a growing reliance on sovereign-backed financing, with government guarantees surging 52% to Rs2,164 billion.

Experts warn that this "re-profiling" of debt effectively shifts commercial risk directly onto the sovereign balance sheet, further narrowing the country’s fiscal space. 

Further, Pakistan’s State-Owned Enterprises are facing a "moment of truth" as the government mandates a total transition to International Financial Reporting Standards (IFRS) by February 2026.

The FY2025 Aggregate Report warns that the era of "regulatory arbitrage", where losses could be "parked" or deferred on balance sheets, is coming to an end.

The report identifies a critical governance deficit: 86% of SOEs are currently "critically non-compliant" with the SOE Act 2023.

A major hurdle remains the "circular debt" receivables, which have historically been treated as guaranteed assets. Under the new IFRS 9 rules, these must be measured using "Expected Credit Loss" models, a shift that could "wipe out accumulated profits" and sharply reduce equity for many energy and gas sector giants.