he national economy has long been a bit of a rollercoaster. If you have been following the numbers, you know we are in the middle of another big push—this time, to meet some tough revenue collection targets under the watchful eye of the International Monetary Fund. It is a familiar story: we sign up for an IMF programme, promise to reform and then scramble to keep up with the conditions. This time, though, the stakes are higher.

The government set itself an ambitious tax revenue target of Rs 13 trillion for the 2024-25 fiscal year. That is roughly $46.66 billion and a nearly 40 percent increase over the collection last year. A bold move, no doubt, but can we actually pull it off?

So far, the results are mixed. From July to December 2024, the Federal Board of Revenue collected Rs 5.623 trillion, falling short of its Rs 6.009 trillion target by Rs 386 billion. February 2025 was not much better, with a collection of Rs 681 billion against the projected Rs 714 billion. These shortfalls are setting off alarm bells. If we keep missing targets like this, we’ll be in trouble when it comes time to show the IMF that we’re sticking to our commitments.

There’s a silver lining. Provincial governments, for once, have generated a cash surplus of Rs 776 billion, exceeding their target of Rs 750 billion. Revenue collection at the provincial level has also been better than expected, hitting Rs 442 billion against a projection of Rs 376 billion. If only the federal government could match that momentum.

Of course, meeting revenue targets is not just about collecting taxes—it is also about reforming the system. The IMF has been clear: Pakistan needs to broaden its tax base, cut down on exemptions and go after tax dodgers with real enforcement. The problem? Our tax-to-GDP ratio is stuck at around 9.2 percent, one of the lowest in the region. Also, the formal economy is taxed to death while the informal economy—representing nearly 70 percent of our economic activity—flies under the radar.

We have seen this before. The government wants to tax the untaxed, and suddenly, business lobbies and political groups start making noises. No one likes paying more taxes, especially when they think the system is unfair. Let us be honest: our enforcement mechanisms have been weak for years. Big businesses and wealthy individuals underreport their incomes and tax evasion is practically a sport.

There is another problem, too. Import restrictions meant to curb the balance of payments crisis have cut into customs duties—one of our key revenue streams. On top of that, sluggish economic activity is slowing down sales tax collection. The government is stuck between a rock and a hard place: it needs to tax more, but the economy isn’t in a great shape to absorb the hit.

Still, not all is lost. The government is trying to turn things around with new technology and stricter oversight. The FBR has rolled out an 800 IP-based live monitoring camera system in Model Bazaars to track revenue collection and stock availability in real time. The idea is that with more transparency, fewer leaks will happen. Tax authorities are also using artificial intelligence to detect tax evasion and crack down on non-compliant businesses.

From July to December 2024, the Federal Board of Revenue collected Rs 5.623 trillion, falling short of its Rs 6.009 trillion target by Rs 386 billion. February 2025 was not much better, with a collection of Rs 681 billion against the projected Rs 714 billion.

Cutting down on tax exemptions? For years, certain sectors—agriculture, real estate and industries with powerful backers—have enjoyed special privileges that let them pay little to no tax. That’s changing. The government is phasing out these exemptions and making sure that high-income earners pay their fair share. Punjab Model Bazaar Authority chairman Afzal Khokhar has ordered Model Bazaars officers to stay in the field and keep a close watch on revenue collection. Underperforming tax officers are being held accountable, which is something we don’t see often enough.

Will this be enough? That’s the billion-dollar question.

There’s some cautious optimism. GDP growth is projected to hit 3.5 percent in 2025. If inflation stabilises and the exchange rate holds steady, business activity might pick up. That could mean more tax revenue. The government is also in talks with the IMF for another multi-billion-dollar bailout package, which could give us breathing room to implement more reforms. If we can secure that deal, it might even boost investor confidence, which, in turn, could help the economy recover.

In Punjab, Chief Minister Maryam Nawaz Sharif has been vocal about balancing fiscal discipline with public relief. It is a tough act to pull off—people are already feeling the weight of rising costs, and imposing new taxes cannot be popular. But there is recognition that without fixing the tax system, we will just keep repeating this cycle of IMF bailouts and economic crises.

There is also some hope in our trade sector. If global trade conditions improve, Pakistani exports could perform better, bringing in more revenue. The government is betting on regional trade partnerships to open up new sources of income. Whether those bets pay off, remains to be seen.

At the end of the day, Pakistan’s revenue collection battle is not just about numbers—it is about long-term stability. We have seen governments in the past make short-term fixes just to keep the IMF happy, only to backtrack when political pressure mounts. This time, there is no room for that. We need policy continuity, strong enforcement, and, most importantly, the political will to see these reforms through.

Can we hit that Rs13 trillion target? It is going to be an uphill battle. But if the government sticks to its guns—tightening tax enforcement, cutting down on exemptions and expanding the tax net—there’s a chance we can get close. If we do, it might just be the start of breaking free from our cycle of economic crises.

The writer is a chartered accountant and a business analyst