Pakistan prepares for IMF review amid PKR 330 billion tax shortfall
No mini-budget yet as talks could unlock $1.2 billion in fresh funding
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
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Pakistan has begun preparations for its upcoming review talks with the International Monetary Fund (IMF), government sources said, as the country faces a significant tax revenue shortfall in the current fiscal year.
Despite a tax shortfall of PKR 330 billion ($1.2 billion) in the first half of the fiscal year, authorities are not currently considering a mini-budget to introduce additional revenue measures, according to government officials. However, a final decision will be made after negotiations if the IMF presses for corrective action.
The revenue gap was recorded by the Federal Board of Revenue during the first six months of the fiscal year, sources said.
Other commitments being fulfilled
Officials added that the process of timely electricity and gas price adjustments will continue in line with commitments made under IMF programs. Monthly and quarterly electricity tariff adjustments, as well as determinations of the base tariff, are being carried out on schedule. Gas prices are also being reviewed and set within the stipulated time frame, officials said.
An IMF delegation is scheduled to visit Pakistan from Feb. 25 to March 11 for review discussions. The delegation will begin engagements in Karachi with the State Bank of Pakistan before holding formal talks in Islamabad starting March 2.
Simultaneous negotiations will take place for the third review of the $7 billion Extended Fund Facility (EFF) program and the second review of the $1.4 billion climate financing program. The talks will assess Pakistan’s economic performance during the first half of the current fiscal year.
Approval to unlock $1.2B
If the reviews are successfully concluded, Pakistan is expected to receive approximately $1.2 billion in combined disbursements. This includes the fourth tranche under the EFF program and the second installment under the climate financing facility.
So far, Pakistan has received $3.3 billion from the IMF under the two ongoing loan programs.
Pakistan is currently engaged in two separate IMF lending arrangements: a $7 billion Extended Fund Facility and a $1.4 billion climate financing program.
Last week International Monetary Fund (IMF) said Pakistan has made immense progress under its program, with recent data showing the primary balance in line with Fund conditions. Upcoming discussions are expected to focus largely on revenue collection and energy issues.
IMF Communications Director Julie Kozack said Thursday during a press briefing, “We do have a staff team that is expected to visit Pakistan starting Feb. 25 for discussions on the third review under the EFF and the second review under the RSF.Kozack said Pakistan’s policy efforts under the EFF have helped stabilize the economy and rebuild confidence.
“Fiscal performance has been strong,” she said, noting that Pakistan recorded a primary fiscal surplus of 1.3% of gross domestic product in fiscal year 2025, in line with program targets.
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