As negotiations with the International Monetary Fund (IMF) progress, Pakistan has unveiled a detailed plan to address its revenue shortfall, banking on a potential Rs. 200 billion windfall if pending super tax cases are decided in the Federal Board of Revenue’s (FBR) favor.

According to FBR insiders, the verdict on the super tax disputes is anticipated by late September or early October. Should the decision favor the FBR, authorities plan to immediately recover the amount to plug the fiscal gap. However, if the ruling goes against the revenue body, the government will need to implement additional measures worth Rs. 180-200 billion, officials told the IMF.

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The FBR also highlighted that recent floods have caused tax losses estimated at Rs. 55-60 billion. Pakistan has requested some relief in its tax collection targets from the IMF, though no final response has yet been received. Officials are also considering enforcement measures and the possible imposition of a flood levy to enhance revenue.

The IMF has urged Pakistan to broaden its tax base instead of relying on already high rates, emphasizing structural reforms. Discussions also covered the National Finance Commission (NFC) Award, with proposals to reduce provinces’ share from the current 82% (based on population) and transfer the Benazir Income Support Programme to provincial governments, encouraging them to raise their own revenues.

The President of Pakistan has appointed the Finance Minister as chairman of the 11th NFC Award. Meanwhile, government expenditures surged to a record 21.4% of GDP in FY2024-25, compared to 19.5% the previous year, pushing the fiscal deficit beyond Rs. 6.1 trillion.