Pakistanis could face more than Rs. 1.1 trillion in additional taxes and revenue measures in FY2027 as the federal government, provincial governments, and petroleum levy collections are all set to contribute toward new IMF-linked fiscal targets.
The federal government has urged all four provinces to raise more than Rs. 400 billion in additional taxes during FY2027 as part of commitments made to the International Monetary Fund under ongoing fiscal reforms.
According to Express Tribune, the provinces have been assigned separate revenue targets, with Sindh expected to generate around Rs. 200 billion in additional taxes, Punjab about Rs. 175 billion, Khyber Pakhtunkhwa Rs. 45 billion, and Balochistan nearly Rs. 20 billion.
The discussions took place during a virtual meeting chaired by Finance Minister Muhammad Aurangzeb with provincial finance ministers to review fiscal targets and budget preparations for the next financial year.
The new provincial tax targets form part of broader IMF-linked measures aimed at generating additional revenues equal to around 0.3 percent of GDP. The federal government is separately expected to generate another Rs. 430 billion through new taxes and enforcement measures, while petroleum levy collections are projected to contribute an additional Rs. 260 billion.
Combined, the federal and provincial governments are expected to generate over Rs. 1.1 trillion in additional revenue during FY2027. Officials said the IMF is pushing provinces to increase collections from agriculture income tax, sales tax on services, property taxes, stamp duties, and registration fees.
The Federal Board of Revenue has also started sharing income tax and sales tax return data with provincial authorities to improve enforcement and expand the tax base. Punjab informed the meeting that it plans to expand sales tax on services coverage to 40 major cities, while the centre urged Sindh to improve tax collection from the agriculture and real estate sectors.
The IMF has noted that agriculture remains one of Pakistan’s most undertaxed sectors despite contributing nearly one quarter of the country’s economic output. According to the IMF, the effective tax rate on agriculture is only 0.3 percent. Meanwhile, the IMF has set a petroleum levy collection target of Rs. 1.727 trillion for the next fiscal year, approximately Rs. 260 billion higher than the current year’s target.
The federal government has also assured the IMF that provinces will avoid introducing measures that could undermine commitments agreed under the programme as Pakistan seeks to maintain fiscal discipline and achieve a primary budget surplus target of 2 percent of GDP in FY2027.
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Why not tax the corporations .? Call centers currently pay only 0.25 percent tax while I pay 20 percent