The International Monetary Fund (IMF) has proposed a huge increase in the standard General Sales Tax (GST) rate by 100 basis points to 19 percent in the upcoming federal budget for 2026-27.
The Revenue Division is strongly opposing the move as even higher indirect taxation could intensify inflation on the public.
If implemented, the proposed hike is estimated to generate an additional Rs. 250–300 billion in revenue.
While the Federal Board of Revenue (FBR) is expected to approach the Rs. 13 trillion collection mark, achieving the full target remains uncertain.
Other Tax Measures
Alongside the GST proposal, the IMF has recommended ending concessional tax treatment for hybrid vehicles by raising their GST from 8.5 percent to the standard 18 percent, as the current incentive regime is set to expire in 2026.
For the retail sector, the IMF has backed a simplified fixed-tax scheme for small retailers with annual turnover up to Rs. 200 million, under which they would pay Rs. 25,000 and be exempted from routine audits.
Retailers under this system would also receive FBR-issued QR code certification.
IMF has also urged Pakistan to explore alternative revenue measures to address gaps in the salaried class tax structure.
Last-minute adjustments to the budget are still possible before final approval.
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Meaning interest rates must be increased to 22 percent.
Corp taxes must be increased
Funny how no one is doing what needs to be done
Gst is already highest is ever been
Why aren’t the rich being made to pay taxes. Corp taxes must be levied
Why should I pay 20 percent but a billionaire from call center gets to pay less than 1 percent
Government should distribute contraceptive among themselves so they dont produce more of themselves.
How funny it is that IMF is noticing every single thing in Pakistan which directly impact the ordinary people but they give damn about what our government is enjoying in terms of perks & benefits.