Consensus eludes Pakistan, IMF over revenue, expenditure

IMF high-ups are rejecting tax proposals, making it hard for budget makers to finalise revenue measures with their impacts

By Mehtab Haider

May 28, 2025

The seal of the International Monetary Fund is seen in Washington DC, USA. — AFP/File

ISLAMABAD: Pakistan and the IMF have so far been unable to reach a consensus on the total revenue and expenditure framework for the upcoming budget.

Although both sides held informal virtual parleys on Tuesday, nothing concrete has been finalised so far. With change of guard at the IMF, as Ms. Eva assumed the charge as Mission Chief following the completion of Nathan Porter’s tenure, the finalisation of budgetary numbers has not yet been accomplished. However, both sides have kick-started virtual talks with the anticipation to undertake number crunching on revenue and expenditure side by the end of the current week. Then the IMF will have to endorse the proposed revenue measures in order to jack up the collection to the desired mark for the next financial year 2025-26.

Top official sources confirmed to The News on Tuesday night that the IMF team, before they departed from Islamabad, conducted detailed deliberations with the FBR and Finance Ministry high-ups last Friday.

The IMF high-ups are rejecting the tax proposals, making it hard for the budget makers to finalise revenue measures with their impacts. “Last Thursday and Friday, the FBR high-ups held detailed meetings in which certain measures were proposed, but again both sides remained unable to firm up the revenue measures,” top official sources in the Finance Division confirmed.

In such circumstances, according to the sources, it made it hard for the Finance Division to finalise expenditure estimates in totality. The FBR’s tax collection target is likely to hover around Rs14.05 trillion to Rs14.2 trillion depending upon expenditures limits.

In order to finalise the Public Sector Development Programme (PSDP) for the next budget, Prime Minister Shehbaz Sharif has constituted a special committee to review those projects which were going to be deleted from the PSDP list. The planning ministry proposed around over 100 development schemes be deleted from the PSDP list in order to create cushion for insertion of new schemes in the next budget.