Pakistan misses revised target of PKR 12.3B, eyes PKR 11.9B in revenue collection

Pakistan’s federal government has estimated total revenue collection of PKR 11,900 billion for the current fiscal year, missing the earlier revised targets, and outlines new tax measures and fiscal reforms.

According to Finance Secretary Imdad Ullah Bosal, the Federal Board of Revenue's (FBR) initial tax target of PKR 12,970 billion was revised downward to PKR 12,300 billion for fiscal year 2024–25.

In a meeting of the National Finance Committee, the government proposed the imposition of PKR 312 billion in new taxes, while an additional PKR 389 billion is expected to be collected through enforcement measures.

Last year, the International Monetary Fund (IMF) did not accept enforcement-based collection as a reliable method. However, this year the government has approved enforcement-based revenue of PKR 389 billion, said Bosal.

The government has also proposed to fix the Petroleum Development Levy (PDL) at PKR 80 per liter and introduce a carbon levy of PKR 2.50 per liter, which will be included in the PDL total.

Spending, debt, and reform

Minister of State for Finance Bilal Azhar informed the committee that the government has managed to reduce interest payments by PKR 800 billion, a critical step toward controlling the budget deficit.

Pakistan plans to allocate PKR 8,207 billion for interest payments in the next fiscal year. The primary balance is estimated at PKR 1,706 billion, and the federal fiscal balance is projected to be PKR 6.5 trillion, according to Bosal.

He also confirmed that PKR 662 billion from the Public Sector Development Program (PSDP) has been utilized this year, while provincial surpluses are projected at PKR 1,464 billion for next year.

Welfare and downsizing

The government has allocated PKR 716 billion for the Benazir Income Support Program (BISP) for the upcoming fiscal year, maintaining focus on social safety nets.

A 50% special relief allowance for army officials and a 20% allowance for Jawans, on their basic salaries, was also proposed to the committee.

During the meeting, the finance minister also emphasized that utility stores are part of the government's rightsizing and downsizing plan.

He stated that Pakistan can no longer afford leakages in State-Owned Enterprises (SOEs), noting that SOE losses have exceeded PKR 1,000 billion.