Pakistan has told the International Monetary Fund (IMF) that the Gulf war has slowed economic activity and hurt tax collection. Officials estimate first-quarter revenue losses at Rs144 billion, but insist the government can still meet its quarterly collection target.
The government presented its assessment during Monday’s opening meetings with the visiting IMF review mission. Discussions covered revenue performance, disruption in the Strait of Hormuz and structural reforms, including mandatory digital asset declarations for federal civil servants.
FBR confident of meeting quarterly target
The Federal Board of Revenue expects to achieve the agreed July-September target of Rs3.053 trillion by September 30, 2026.
Officials forecast September collection at around Rs1.330 trillion, against a monthly target of Rs1.343 trillion. That would leave September receipts approximately Rs13 billion below the monthly goal.
Nevertheless, tax authorities told the mission that the anticipated collection would allow them to meet the overall first-quarter target.
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The FBR linked the revenue pressure to higher fuel prices and weaker economic activity following disruption in the Strait of Hormuz. Officials identified sales tax and withholding tax collected at the import stage as particularly affected.
The estimated Rs144 billion loss reflects the conflict’s impact on receipts during the first quarter of the current fiscal year. It does not represent a declared shortfall against the quarterly target, which officials still expect to achieve.
Around 10,000 officials face asset deadline
The Establishment Division and tax authorities also briefed the mission on digitising the Asset Declaration Scheme. The scheme falls under Section 15-A of the Civil Servants Act, 1973.
Around 10,000 federal civil servants must submit details of their movable and immovable assets through the digital system.
Officials stressed that participation would be mandatory for employees covered by the scheme. The government has set October 30, 2026 as its target for completing the declaration process.
Authorities expect to publish the digitised declarations in December 2026 or January 2027.
The initiative aims to strengthen public-sector transparency and accountability while improving scrutiny of assets held by federal civil servants. Its implementation forms part of the structural reform discussions alongside the revenue review.
IMF reviews could unlock $1.2 billion
The ongoing negotiations cover the fourth review of Pakistan’s $7 billion Extended Fund Facility and the third review of its climate-focused financing arrangement.
The mission, led by Iva Petrova, is expected to remain until the first week of October. Successful reviews could make Pakistan eligible for approximately $1.2 billion in combined disbursements by late November or early December.
That includes about $1 billion under the EFF and $200 million under the Resilience and Sustainability Facility.
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The IMF approved Pakistan’s 37-month EFF programme in September 2024 to support economic stability and structural reforms.
During the current talks, the mission will assess fiscal performance, revenue mobilisation and progress against agreed programme benchmarks. Officials will also discuss how the Gulf conflict has affected Pakistan’s economy and its ability to deliver those commitments.
