Pakistan and IMF finalize key budget goals for FY2026-27

Pakistan and the International Monetary Fund (IMF) have reportedly completed talks on the federal budget for the next financial year. Both sides have agreed on key budget goals and important economic measures.

The federal budget for FY2026-27 is likely to be around Rs18 trillion. Most budget matters have been settled. However, talks between the Federal Board of Revenue (FBR) and the IMF are still ongoing. The discussions focus on possible tax relief for salaried workers.

According to reports, the IMF has agreed to reduce the FBR’s tax collection target for the current fiscal year. This is the second reduction in the target. The revised goal has reportedly been cut from Rs13.979 trillion to Rs13.005 trillion.

For the next fiscal year, the government plans to set a tax collection target of about Rs15.264 trillion. Officials believe this target will help increase revenue and support the economy.

The proposed tax plan includes Rs7.413 trillion from direct taxes. Sales tax is expected to generate Rs4.727 trillion. Customs duties may bring in Rs1.651 trillion. The Federal Excise Duty could add another Rs1.043 trillion.

The Petroleum Development Levy (PDL) is expected to remain an important source of income for the government. Sources said the target may rise to Rs1.727 trillion next year. The current year’s target is Rs1.468 trillion.

Non tax income is projected at around Rs2.768 trillion. In addition, gas surcharge collections may contribute about Rs151 billion.

Debt payments are likely to remain the government’s biggest expense. The country may spend Rs7.824 trillion on interest and debt repayments. This includes Rs6.652 trillion for local debt and Rs1.107 trillion for foreign debt.

The government may introduce new taxes worth around Rs220 billion. These measures are aimed at meeting targets agreed with the IMF.

At the same time, officials are reviewing income tax rates for salaried people. The government is considering options to provide some relief to taxpayers in the formal sector.

The federal budget is expected to be presented in the coming days. It will outline the government’s plans for taxes, spending and economic policy for the next financial year.