Cash-strapped Pakistan won't impose more taxes this year: Report

Pakistan's Prime Minister Shehbaz Sharif is facing public criticism for raising taxes and energy costs to meet the conditions of the IMF loan package

Pakistan's government will not be imposing additional taxes for the current fiscal year since it is optimistic that it will meet its collection target, according to a Bloomberg report.

Pakistan's tax revenue goal is of 13 trillion rupees ($47 billion) for the financial year ending in June 2025 (Representational Image/Pixabay)

What is Pakistan's tax collection target?

Pakistan's tax revenue goal is of 13 trillion rupees ($47 billion) for the financial year ending in June 2025.

Finance Minister Muhammad Aurangzeb said in a televised address on Sunday that this will be achieved through strict adherence to current policies.

“We are going to be very firm on compliance and enforcement,” the report quoted Aurangzeb as saying.

This comes at a time when the government of Pakistan Prime Minister Shehbaz Sharif is facing public criticism for raising taxes and energy costs.

However, this is being done to meet the conditions of the International Monetary Fund (IMF) for a loan package.

An IMF team completed talks with Pakistan last week, with both sides agreeing on the need for the country to continue prudent fiscal and monetary policies and also mobilize revenue from untapped tax bases such as retail and agriculture, according to the report. The government may also be selling unprofitable state-owned entities to reduce the economy's financial burden.

Pakistani officials at that time shared the government’s road map when it came to reforms in taxation, energy and state-owned enterprises sectors, privatization and public financing.

“It’s an ongoing dialogue, conversation to build trust and credibility,” the report quoted Aurangzeb as saying.

The IMF will also be holding an initial performance review for Pakistan’s $7 billion loan program in the first quarter of 2025.