The International Monetary Fund is expected to send its mission to Pakistan next month to help finalize the federal budget for FY2026-27 with a strong focus on revenue targets and tax reforms.
According to the current framework, the Fund is considering a Federal Board of Revenue tax collection target of Rs. 15.564 trillion for the next fiscal year, setting an ambitious benchmark for the country’s fiscal planning.
Finance Minister Muhammad Aurangzeb has already held initial discussions with the Pakistan Business Council and the Overseas Investors Chamber of Commerce and Industry to gather input from the business community and foreign investors, accelerating the consultation process for the upcoming budget.
At the same time, the minister of state for finance and the prime minister’s adviser on industries met representatives of the All Pakistan Textile Mills Association to address concerns over rising logistics and freight costs. These concerns have intensified due to recent regional tensions and conflict related disruptions, which could have a direct impact on industrial competitiveness and export performance.
Officials involved in budget planning are said to prefer keeping the FBR’s tax target closer to Rs. 15.232 trillion. This reflects concerns within the government that the tax machinery may struggle to achieve the ongoing fiscal year’s collection goal of Rs. 13,979 billion, making a sharply higher target difficult to sustain.
The FBR is also pushing for meaningful tax relief measures in the coming budget. Among the key proposals under discussion are reductions in the Super Tax rate and lower tax burden for the salaried class, both of which have remained major concerns for businesses and individuals.
In addition, the government is weighing options to approach the IMF during its May 2026 mission with a request to withdraw certain withholding taxes, particularly those categories where refund claims have accumulated significantly. This move is aimed at easing cash flow pressures on businesses and improving the overall tax administration framework.
