ISLAMABAD: Pakistan has assured the International Monetary Fund (IMF) that it will provide more details regarding the statistical discrepancy of Rs 853 billion in the financial accounts of the federal and provincial governments to address the concerns of the global financial institution.
On the other hand, there has been no significant increase in agricultural income tax collections, and during the last fiscal year, the total collections of Punjab and Sindh remained just over Rs 5 billion.
According to sources, the IMF mission visiting Pakistan held meetings regarding large-scale statistical discrepancies in the budget accounts of federal and provincial governments, heavy block allocations in the federal budget, agricultural income tax collections, and federal revenue targets.
According to government officials, the Federal Board of Revenue (FBR) has linked the achievement of the annual tax target of Rs 15,263 billion to the Middle East situation and its possible effects on the Pakistani economy.
Sources said that the IMF sought a briefing from the Ministry of Finance on the statistical discrepancy of Rs 853 billion that emerged in the accounts of the federal and four provincial governments during the fiscal year 2025-26.
Out of this total amount, a difference of Rs 448 billion was found in the accounts of the federal government; however, the IMF was told that this difference was mostly due to investments by provincial governments in treasury papers, withdrawal of funds before the end of June, and inconsistency in the recording of actual expenditures in July or later. A statistical discrepancy of Rs 266 billion was found in the accounts of the Punjab government.
According to an official of the Punjab Finance Department, its main reason is the matter of commercial accounts and the difference between the inflow and outflow of funds in these accounts throughout the year.
According to the provincial government, the difference in the procedure for compiling the accounts of the federation and the province is also one of its reasons. Due to delays in the release of development funds till June, large amounts remain unused.
To utilize these funds, cheques are issued before the end of June; however, actual payments from Account One are made after June 30. The Ministry of Finance has assured the IMF that more details will be provided for the satisfaction of the mission. According to officials, this statistical discrepancy will not have any negative impact on the primary budget surplus shown by the government, which is equal to 2.9 percent of GDP.
According to sources, the IMF also obtained details from the provincial governments regarding revenue collections after increasing the agricultural income tax rate from 15 percent to 45 percent. The 45 percent agricultural income tax rate is equal to the tax rate levied on business income. The IMF was told that agricultural income tax collections remained extremely low during the last fiscal year, and there is also a fear that Punjab and Sindh will not achieve their targets in the current fiscal year as well.
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