Govt to address Rs853b discrepancy

Sources said that the IMF asked the finance ministry about the Rs853 billion statistical discrepancies in the accounts of five governments in fiscal year 2025-26. Out of the Rs853 billion, the discrepancies of Rs448 billion were in the federal government accounts.

However, the IMF was more because of investments by the provincial governments in treasury papers, mismatch of cash withdrawals before the end of June and actual expenses in July and onwards. A Rs266 billion discrepancy has been.

An official of the Punjab Finance Department said that the provincial discrepancy was mainly because of operations of commercial accounts and the difference between outflows and inflows over the year in the commercial accounts. The provincial government said that another reason for the discrepancy was the difference between accounting procedures of the provincial and federal governments.

A key factor was the delay in release of development funds till June, which resulted in huge savings. To utilise the money, cheques are issued before June but the actual cash outflow from account-1 takes place after June 30,.

This is a routine in the last two weeks of June as accounts are closed and cheques are passed by the office of the accountant general but actual outflow takes place after June 30.

Sources said that the absence of a full rollout of the treasury single account was also contributing to large fiscal discrepancies as many government entities and authorities were still not depositing their funds in the single account. They said that the finance ministry had now assured the IMF that it would share more details to satisfy the mission.

They added that the discrepancy would not have any adverse impact on the government's primary budget surplus of 2.9% of GDP.The primary surplus is the core condition of the IMF programme, which the government says it has met and it is hopeful that the review talks will successfully conclude on October 7. Agricultural income tax.

Sources said that the IMF also asked about updates from provincial governments regarding the agriculture income tax collection after increasing the rates from 15% to 45%. The 45% rate is equal to the business income tax rate.

The IMF was tax collection remained poor in the last fiscal year and there were chances that Punjab and Sindh would again miss their targets for the current fiscal year. IMF, in the last fiscal year, the agriculture income tax target was Rs2 billion but the Sindh government collected only Rs1.1 billion.

The target for this fiscal year is Rs6 billion, which will be missed again by at least Rs3 billion, said the sources. The Punjab government's budget books showed that against the last fiscal year's target of Rs10.5 billion, the collection was only Rs4 billion.

For this fiscal year, the agriculture income tax target of the Punjab government is Rs12.5 billion. The IMF was understanding between the FBR and the Sindh government required data-sharing by the FBR of the agriculture income in FBR's returns.

The FBR provided data of 44,350 people declaring agriculture income in returns for tax year 2025. However, the provincial government was of the view that there was a need for real-time connectivity between the FBR and the Sindh Revenue Board.

The provincial government has already transferred agricultural income tax administration from the Board of Revenue to the Sindh Revenue Board. It has also introduced digital registration and filing mechanisms for taxpayers to successfully achieve 3,650 registrations and 1,912 returns.

The IMF asked the FBR about missing last fiscal year's tax target and the prospects for the current fiscal year. The FBR missed last year's downward-revised target by Rs929 billion. The IMF was achieve its all key performance indicator targets, including digital invoicing and monitoring of production lines.

The first-quarter target of Rs7 trillion would also be achieved, the IMF was assured. However, the FBR remained non-committal about meeting the annual target of Rs15.263 trillion and would depend upon how the regional security situation unfolds, the sources added.

The IMF also inquired about the poor response to the government's second fixed tax scheme for traders. It was to provide a last chance to traders before the government begins crackdown by imposing penalties, the sources added.