ISLAMABAD: Pakistan’s Federal Board of Revenue (FBR) has achieved its tax target for the third quarter of the current fiscal year and collected an additional Rs3 billion, Pakistani state media reported on Sunday.

Pakistan’s narrow tax base and enduring tax evasion issue have often led to the problem of insufficient revenue collection. The shortfall exacerbates the government’s tendency to run a high fiscal deficit, often financed through domestic and international borrowing, increasing the nation’s debt burden.

The country’s new administration has recently decided to digitalize the tax collection system to prevent leakages even as a large segment of the national economy remains undocumented.

“At the end of the third quarter of the current fiscal year, FBR collected 6.710 trillion rupees in taxes, which is 3 billion rupees more than the target of 6.707 trillion rupees,” the state-run Radio Pakistan broadcaster reported.

In Dec., the FBR said Pakistan had a “very narrow tax base” of around 5.2 million people in 2022, out of a population of 240 million people and it had planned to add 1.5 million new taxpayers to the existing base during this fiscal year.

Pakistan, which has been facing an economic meltdown, is also making efforts to introduce structural reforms under a $3 billion International Monetary Fund (IMF) program that helped it avert a sovereign default last year.

The South Asian country has to meet a primary budget deficit target of Rs401 billion ($1.44 billion), or 0.4 percent of its gross domestic product, for the current fiscal year before the government presents its budget in June.