An International Monetary Fund (IMF) review mission is expected to visit Pakistan in the last week of this month to begin talks for the third review under the $7 billion Extended Fund Facility (EFF) and the release of a fourth tranche of $1 billion.
Negotiations on the release of the second tranche under the Resilience and Sustainability Facility (RSF) will also be part of the discussions. While the final schedule has yet to be confirmed, the Ministry of Finance and the Federal Board of Revenue (FBR) have begun preparatory work ahead of the talks.
The mission is finalizing dates for the review, which typically takes place in early March or September. According to sources, the talks will also shape the major contours of the 2026–27 federal budget, including detailed discussions on the fiscal and budgetary framework.
The IMF team is tentatively expected to arrive in Karachi in the last week of the month, where it will meet officials from the State Bank of Pakistan as well as representatives of the Overseas Investors Chamber of Commerce and Industry and the Pakistan Business Council on February 26 and 27, 2026.
Pakistan plans to seek flexibility from the IMF in setting the fiscal framework to create space for growth-oriented measures. The government intends to ease the tax burden on salaried individuals and the formal manufacturing sector in the next budget to support economic activity.
The formal sector has long complained of excessive taxation, with corporate entities saying the super tax has pushed effective tax rates to between 55 and 60 percent for higher income brackets. After the Federal Constitutional Court upheld the levy, businesses have renewed calls for its reduction and a gradual phase-out in coming years.
Industry groups are also pressing for a one-percentage-point cut in the corporate tax rate to 25 percent from the current 29 percent to provide certainty and improve competitiveness.
Officials say such relief will depend on whether Pakistan can persuade the IMF to lower the FBR’s tax collection target. Otherwise, the Fund is likely to require alternative revenue measures to offset any reductions for the salaried class or the manufacturing sector.
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