ISLAMABAD: Finance Minister Muhammad Aurangzeb has expressed confidence in the government's progress toward meeting the International Monetary Fund's (IMF) structural benchmarks, highlighting that Pakistan's efforts are on track.

He emphasized that the country is "in the right place" in its ongoing commitments under the IMF's program.  A significant milestone in this regard is the signing of the National Fiscal Pact, which seeks to enhance fiscal cooperation among Pakistan's provinces. Notably, the agricultural income tax legislation has been passed by Punjab and Khyber Pakhtunkhwa, with Sindh recently approving it as well. Aurangzeb assured that Balochistan will follow suit, further aligning the provinces' tax structures. In a major development on the taxation front, the Sindh cabinet approved the Agricultural Income Tax Bill 2025, set to come into effect in January 2025. This legislation represents a critical step towards broadening Pakistan's tax base and generating greater revenue from the agriculture sector, which has traditionally been under-taxed.

This move is expected to support the government's ongoing efforts to meet IMF-imposed fiscal targets, which are an essential part of Pakistan's $7 billion Extended Fund Facility (EFF) arrangement. Aurangzeb also shared his optimism regarding the upcoming IMF six-month review. He expressed confidence that the review, scheduled for late February or early March, would be favorable, underscoring the government's commitment to fulfilling its obligations under the EFF. The review will focus on assessing Pakistan's progress in meeting fiscal and structural reform benchmarks outlined by the IMF. The first review is expected to take place by March 15, 2025, based on the performance criteria set for the end of December 2024. Furthermore, the finance minister outlined the government's approach to the upcoming budget-making process, which has been accelerated. Discussions with various stakeholders have been preemptively scheduled over the next one to two months to ensure a comprehensive and consultative budget process. Aurangzeb acknowledged that while the government faces certain constraints due to its obligations under the IMF program, it remains focused on fiscal discipline and enhancing the country's tax-collecting capacity. Finally, the finance minister reiterated that significant progress is being made in reforms within the Federal Board of Revenue (FBR).

These reforms aim to streamline Pakistan's tax administration system and improve the overall efficiency of tax collection, which remains a priority for the government as it works towards fiscal sustainability.