Pakistan tells IMF: Gulf war slows economy, causes revenue losses
The government on Monday briefed the visiting International Monetary Fund (IMF) review mission that the Gulf War and disruption in the Strait of Hormuz had caused revenue loss in the first quarter and slowed down economic activities, besides informing that around 10,000 federal government employees will be required to digitally declare their movable and immovable assets by October 30, 2026, as part of a mandatory asset declaration regime.
Highly placed government officials told Business Recorder that the first round of meetings between the government and the visiting IMF mission focused on revenue performance, the economic impact of the Gulf conflict and progress on structural reforms, including digitisation of the Asset Declaration Scheme under Section 15-A of the Civil Servants Act, 1973.
On the revenue front, the Federal Board of Revenue (FBR) briefed the IMF mission on the impact of the Gulf conflict on tax collection and expressed confidence that the agreed first-quarter revenue target of Rs3.053 trillion would nevertheless be achieved by September 30, 2026.
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According to sources, the FBR is expected to collect around Rs1.330 trillion in September against the monthly target of Rs1.343 trillion.
Tax authorities told the IMF mission that the expected September collection would enable the FBR to meet the overall July-September revenue target of Rs3.053 trillion.
The FBR officials explained that disruption in the Strait of Hormuz following the Gulf conflict had pushed up fuel prices and slowed economic activity in Pakistan, adversely affecting tax collection.
In particular, the impact was felt in sales tax and withholding tax collection at the import stage, officials maintained.
According to FBR estimates, the ongoing conflict has so far resulted in revenue losses of approximately Rs144 billion to the national exchequer during the first quarter of the current fiscal year.
Despite the revenue impact of the external shock, the tax authorities remained confident of meeting the quarterly target agreed with the IMF.
Separately, the Establishment Division and tax authorities briefed the IMF mission on the digitisation of the Asset Declaration Scheme under Section 15-A of the Civil Servants Act, 1973.
The government informed the Fund that around 10,000 federal civil servants would be required to declare their movable and immovable assets under the mandatory scheme.
Officials clarified that the declaration would not be optional and that federal civil servants covered by the scheme would be required to submit their asset details through the digitised system.
The government is targeting October 30, 2026, for completion of the asset declaration process by the concerned employees.
According to officials, the digitised asset declarations are expected to be published by December 2026 or January 2027.
The asset declaration measure is part of the government’s broader effort to strengthen transparency and accountability in the public sector and improve monitoring of assets held by federal civil servants.
The discussions with the IMF mission are continuing, with the Fund reviewing Pakistan’s fiscal and revenue performance, implementation of agreed structural reforms, and the impact of recent external developments on the economy.
The review mission is also expected to examine the government’s progress on agreed programme benchmarks and revenue mobilisation measures during the ongoing talks.
Reference Link:- https://www.brecorder.com/news/40441725
Zamir Ahmed Awan is the founder and Chair of the Global Silk Route Research Alliance, a think tank in Islamabad. He studied engineering at Shanghai University in the 1980s, and years later he went back to China as Pakistan's science counsellor in Beijing, from 2010 until 2016, working on science and higher education cooperation between the two countries.…
