Govt aims for over Rs12tr tax collection in FY25

May 21, 2024 (MLN): Pakistan's economic team has presented a comprehensive macroeconomic framework to the International Monetary Fund (IMF), including a tax collection target of over Rs12 trillion in fiscal year 2024-2025, sources close to the matter said.

To note, the IMF is currently engaged in policy-level discussions with Pakistani authorities for the next phase of its engagement with the country.

Pakistan last month completed a short-term $3 billion Stand-By Arrangement but the government has stressed the need for a fresh, longer term program.

Wall Street bank Citi expects Pakistan to reach an agreement with the IMF for a new four-year program of up to $8 billion by end-July.

Sources said that the IMF has projected Pakistan's GDP growth at 3.5% for FY25, compared to the Finance Ministry's forecast of 3.7%,

Moreover, the IMF has estimated the inflation to stand at around 12.7% in FY25, while the Finance Ministry has estimated a slightly lower figure of 11.8%.

The sources said around Rs9.7tr will be set aside for interest and loan payments in the next fiscal year’s budget.

The current account deficit has been estimated at $4.6bn by the IMF, while the Ministry of Finance is targeting a marginally lower deficit of $4.2bn.

Exports and remittances are forecasted to bring in over $61bn. The export target for FY25 is set at $32.7bn, while remittances are expected to contribute $30.6bn to the cash-strapped economy.

On the import front, the IMF has estimated the import bills to be about $61bn, $3bn higher than the Ministry of Finance's estimate.

Meanwhile, sources revealed that the fiscal deficit is anticipated to be around Rs9.6tr, with the Public Sector Development Program (PSDP) allocation estimated at Rs1tr and the pension bill estimated to increase from Rs801bn to Rs960bn.

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