The International Monetary Fund (IMF) has raised concerns regarding the performance of Pakistan’s Federal Board of Revenue (FBR) and rejected claims that the revenue shortfall has been resolved.
Sources stated that discussions between the IMF mission and the Ministry of Finance are ongoing for $1 billion tranche. A team led by Federal Finance Minister Mohammad Aurangzeb met with the IMF mission to discuss new tax targets, Express News reported on Thursday.
During the meeting, the government provided a briefing on the integration of public institutions and cost-saving measures, including the merger of institutions and the elimination of positions, which resulted in savings of Rs17 billion.
Despite these efforts, the IMF questioned the effectiveness of FBR in addressing the revenue shortfall and rejected the claims made by Pakistani officials regarding the resolution of this issue.
Additionally, the meeting explored the right-sizing of government employees and the possibility of a “golden handshake,” which could lead to the elimination of 700 positions in grades 17 to 22, along with thousands of lower-grade positions.
Sources also mentioned that amendments to the Civil Servants Act are being considered to facilitate the removal of excess government employees. The Ministry of Finance alos presented a strategy to reduce expenditures and address the revenue shortfall.
Earlier, the IMF rejected Pakistan’s request to grant tax exemptions for foreign investment projects. The Special Investment Facilitation Council (SIFC) had sought the exemptions during a detailed briefing to the IMF delegation, arguing that tax relief would help attract foreign investors.
However, the global lender refused the request, maintaining its stance on fiscal discipline.
During the briefing, SIFC officials presented investment opportunities, governance structures, and infrastructure plans.
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