ISLAMABAD: Prime Minister Shehbaz Sharif has called for an explanation regarding Pakistan’s failure to meet three key International Monetary Fund (IMF) conditions. The inquiry comes as Punjab blames the federal government for weak revenue projections and the withholding of its tax share, which led the province to miss its cash surplus target.
Sources revealed that while the federal government holds Punjab accountable for breaching the target due to overspending on development projects, both governments are led by the PML-N. The Prime Minister has asked the Ministry of Finance and the Federal Board of Revenue to respond to reports indicating that Pakistan missed crucial IMF targets, including the Rs12.3 trillion tax goal, the collection of Rs50 billion from traders, and the generation of Rs1.2 trillion in cash surpluses by the four provinces.
A fiscal operations summary from the Ministry of Finance this week disclosed that the provinces fell short of the targeted cash surplus, with a total of Rs921 billion generated instead of the required Rs1.2 trillion. While the IMF had set the condition that the FBR must meet its tax targets for the provinces to achieve the surplus, the federal government claims Punjab’s overspending was the primary reason for the shortfall.
However, the Punjab government contends that it failed to meet its surplus target due to the Finance Division withholding tax share allocations under the National Finance Commission, coupled with the FBR’s failure to meet its tax targets. Punjab’s Information Minister, Azma Bukhari, argued that had the federal government released the Rs191 billion due to Punjab by June, the province would have achieved a surplus closer to the targeted Rs630 billion, despite the shortfall in FBR collections.
Finance Ministry officials noted that while other provinces received less funding than projected, they performed better, with Balochistan even exceeding its IMF target. Documents show that Punjab’s revenue was Rs4 trillion, with spending of Rs3.6 trillion, resulting in a surplus of Rs348 billion, though this was significantly less than the targeted Rs630 billion.
The ongoing disagreement highlights tensions between the Centre and the province, as both sides dispute responsibility for the missed targets.
