The IMF has held meetings with officials from Pakistan to conduct discussions as part of the sixth review under its Extended Fund Facility and has issued a press release reporting on its preliminary findings. A Memorandum of Economic and Financial Policies has been reached at staff level and this is being forwarded to the IMF management for approval.
The IMF reports that Pakistan’s economic activity continues to improve and GDP is expected to grow by around 4.3% in fiscal year 2014/15. Fiscal performance has generally been on track and the budget deficit was below the target at the end of December 2014. Although Pakistan is dealing with the deficit the tax revenues were below target by around 0.1% of GDP in the second quarter. This was partly owing to legal challenges to some revenue measures and partly due to the fall in oil prices reducing inflows of duty. The IMF is supporting efforts by Pakistan to deal with the fiscal shortfall through new revenue measures.
Taxpayers should therefore keep in mind that Pakistan will be continuing efforts to collect improve tax collection and there could be further new tax measures in the coming year.
