ISLAMABAD ( The COW News Digital) The government of Pakistan is considering a major downward revision of the Federal Board of Revenue’s (FBR) annual tax collection target, potentially slashing it by Rs300–500 billion to account for current fiscal challenges and macroeconomic realities.
According to sources within the Ministry of Finance, policymakers are exploring the possibility of reducing the ambitious collection goal from Rs14.13 trillion to somewhere between Rs13.7 trillion and Rs13.9 trillion. The adjustment is expected to align with revised projections under the government’s updated macroeconomic framework, which factors in slower-than-expected economic activity, inflationary pressures, and disruptions caused by recent floods.
Officials revealed that the government missed its deadline for the privatization of Pakistan International Airlines (PIA), which was a key revenue-generating reform under the International Monetary Fund (IMF) program. This shortfall has intensified the need to reevaluate fiscal targets in order to keep the budget deficit under control and maintain IMF compliance.
In addition to reducing the tax target, authorities are weighing the introduction of a temporary “Flood Levy” aimed at mobilizing funds for the reconstruction and rehabilitation of flood-hit areas. This special tax would apply to certain sectors or income brackets and is being considered as a means to generate dedicated revenue for disaster recovery efforts.
Economic analysts suggest that while lowering the tax target may provide some breathing space to the government, it also raises concerns about fiscal discipline and its implications for ongoing IMF negotiations. “The government must strike a balance between revenue collection and economic relief, especially for businesses and citizens still recovering from the effects of inflation and natural disasters,” one analyst commented.
If approved, the revised target and any new tax measures would be formally announced in the coming weeks after consultations with the IMF and other stakeholders.
The development reflects the government’s broader strategy to adjust to economic realities while attempting to maintain social and political stability ahead of the next budget cycle.
