A stark revenue shortfall is threatening Pakistan’s lifeline from the IMF. In a blow to the $7 billion EFF program, the Federal Board of Revenue collected 9,307 billion rupees in the first nine months of FY 2025-26, trailing the 9,917 billion target by 610 billion—about 4.4% of the revised 13,979 billion annual goal.
Originally pegged at 14,131 billion, the target was scaled back amid aggressive measures like tax increases and sector-specific reforms. Yet, income tax lags badly: 4,636 billion gathered versus 6,967 billion aimed for, with growth at 12% instead of 20.3%. Sales tax is even more dismal at 3,104 billion against 4,580 billion, growth at 9% short of 17.4%.
Bright spots include customs duties (minor 30 billion deficit) and excise (5 billion surplus), both exceeding 12% growth. But overall, the 19% Q4 leap needed looks improbable.
Currency stability has backfired; the rupee’s milder decline than IMF forecasts has curbed import duties. Middle East conflicts and Hormuz Strait risks loom over trade flows, while volatile commodity prices add uncertainty.
Analysts predict Q4 hinges on international conditions. Without a miracle rally, Pakistan faces stalled IMF disbursements, eroding investor confidence and prolonging economic instability in a nation already burdened by debt.
