ISLAMABAD: Pakistan has decided against introducing a mini-budget for the fiscal year 2024-25, opting instead for an alternative strategy to manage the Rs. 605 billion financial shortfall, according to ARY News, citing official sources.
In ongoing negotiations between Pakistan and the International Monetary Fund (IMF), the federal government presented its new approach, focusing heavily on expediting tax-related court cases to recover pending revenue.
Prime Minister Shehbaz Sharif has pledged full cooperation to ensure the swift resolution of these cases, and Chief Justice of Pakistan Yahya Afridi has reportedly agreed to fast-track hearings on these matters. A critical Supreme Court hearing regarding this tax recovery is set for March 10.
If the Supreme Court ruling favors the government, the Federal Board of Revenue (FBR) expects to recover approximately Rs. 157 billion from these cases. In addition, the FBR has already collected Rs. 23 billion under Section 99D of the Income Tax Ordinance.
Previously, the IMF delegation, led by Nathan Porter, had emphasized that Pakistan must address the revenue shortfall in the next fiscal quarter, leaving no room for slippage in revenue collection targets.
During the talks, officials from the Ministry of Finance and the State Bank of Pakistan (SBP) discussed Islamic banking reforms, refinance schemes, and the transition to development finance with the IMF team. The IMF also urged the immediate implementation of the Bank Resolution Framework, which aims to strengthen the banking sector and reduce systemic risks.
The successful execution of this alternative plan and progress in ongoing IMF talks are critical for unlocking the next $1 billion tranche from the $7 billion loan programme.
