The federal government has told the visiting International Monetary Fund review mission that the US-Iran conflict and disruption in the Strait of Hormuz caused an estimated Rs. 144 billion loss in tax revenue during the first quarter of the current fiscal year.
Government officials said the conflict pushed up fuel prices and slowed economic activity in Pakistan, affecting tax collection, particularly sales tax and withholding tax collected at the import stage.
The disruption in the Strait of Hormuz affected Pakistan’s economy through higher fuel costs and weaker economic activity, according to the government’s briefing to the IMF.
Despite the revenue impact, the Federal Board of Revenue assured the IMF that it expects to meet its first-quarter tax collection target of Rs. 3.053 trillion by September 30.
The IMF mission is continuing to assess the economic impact of the US-Iran conflict alongside Pakistan’s fiscal and revenue performance during its ongoing review.
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