The International Monetary Fund (IMF) has agreed to lower Pakistan’s tax collection goal by Rs150 billion. This decision considers the major economic damage caused by recent floods in the country.
According to official sources, the Federal Board of Revenue (FBR) has a new, lower target. The original goal was Rs14,131 billion for the fiscal year 2025-26. The IMF has now set the revised target at Rs13,981 billion.
This adjustment comes as the FBR reports a current shortfall of Rs199 billion in the first quarter. Earlier, Prime Minister Shehbaz Sharif had proposed a larger reduction of Rs250 billion. The IMF agreed to a Rs150 billion cut.
Officials stated the government’s key goal was to set a realistic revenue target without introducing new taxes.
Read: Pakistan Economy to Grow 3.5% in FY26 Despite Floods, Says FinMin
The IMF explained its decision in its latest Regional Economic Outlook report. The report highlights how the severe monsoon floods have hurt Pakistan’s economy.
The floods have slowed economic growth, increased inflation, and widened the current account deficit. The IMF now estimates Pakistan’s GDP growth will be 3.6% this year. This is below the government’s own target of 4.2%.
Damage to farms, roads, and homes has reduced incomes and driven up prices. The IMF also warned that inflation could rise again in the coming months. This is due to the end of electricity subsidies, planned tariff increases, and ongoing supply chain issues from the floods. Food and energy prices are expected to be the most affected by the situation.
