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Pakistan, IMF Discuss Tax Shortfall Amid Crucial Loan Talks
Pakistan and the IMF enter a critical phase of negotiations as FBR presents plans to address the Rs605 billion tax shortfall. Relief for real estate, tobacco, and salary earners under discussion.
ND
by News Desk
2025-03-10
Pakistan, IMF Discuss Tax Shortfall Amid Crucial Loan Talks

Pakistan’s ongoing negotiations with the International Monetary Fund (IMF) have reached a critical stage as officials from the Federal Board of Revenue (FBR) presented a plan to bridge the Rs605 billion tax shortfall.

According to sources, officials from the Ministry of Finance, FBR, and the Energy sector submitted their respective performance reports to the IMF last week. The IMF is expected to provide feedback on these reports during today’s discussions, shaping the future course of Pakistan’s economic strategy and loan program.

Key Discussions in IMF Talks

The Ministry of Finance’s presentation covered crucial economic indicators, including fiscal deficit control, international financing, and tax-to-GDP reforms. The FBR has been in talks with IMF representatives regarding potential relief measures for key sectors, including real estate, property, beverages, and tobacco.

Additionally, a proposal to reduce the tax burden on the salaried class in the upcoming budget was under discussion, alongside a plan to generate Rs250 billion in tax revenue from various sectors, including retail.

Energy Sector Reforms and Circular Debt Crisis

A major point of discussion was Pakistan’s energy sector, particularly the increasing circular debt. The Ministry of Petroleum and Energy informed the IMF that the government plans to borrow Rs1,250 billion from commercial banks at an interest rate of 10.8% to address this financial burden.

IMF officials were also briefed on measures to control circular debt, reduce electricity bills, improve recoveries, and cut line losses in the power sector—an area where the Fund has been pushing for stronger structural reforms.

Pakistan’s Economic Challenges and IMF Conditions

Pakistan’s economic situation remains fragile, with rising inflation and a widening fiscal deficit. The government is under pressure to implement revenue-generating reforms while balancing relief measures to support struggling businesses and the general public.

With the IMF tranche release at stake, the outcome of these negotiations will play a crucial role in determining Pakistan’s economic trajectory in the coming months.
Tagged:

Pakistan

IMF

FBR

TaxReforms

economiccrisis

EnergyCrisis
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