Govt Aims to Recover Rs500B in Tax Disputes Amid Fiscal Deficit

Prime Minister Shehbaz Sharif has instructed authorities to accelerate the resolution of pending tax cases in courts, setting a target of Rs500 billion in recoveries by June.

Addressing a cabinet meeting, he stressed the urgency of concluding litigation over Rs4 trillion in contested taxes. He cited the Sindh High Court's recent verdict in the windfall income tax case, which allowed the government to reclaim Rs23 billion.

Attorney General Mansoor Awan informed the cabinet that outdated Federal Board of Revenue (FBR) legal processes had caused prolonged litigation delays. Following the prime minister’s directive, reforms have been introduced to fast-track proceedings. However, the government has only projected a Rs300 billion recovery estimate to the International Monetary Fund (IMF).

Meanwhile, the IMF team continues discussions with the FBR on tax collection performance, as Pakistan faces a revenue shortfall of Rs606 billion over the past eight months. Without corrective actions, this deficit could approach Rs1 trillion by June.

To bridge the gap, the government plans to recover Rs300 billion from tax disputes and an additional Rs100 billion through increased taxation on beverages and cigarettes.

Last month, PM Shehbaz urged Chief Justice of Pakistan Yahya Afridi to prioritize tax-related cases, prompting the CJP to seek legislative recommendations to improve judicial efficiency.