Islamabad (HRNW)- The total volume of Pakistan’s federal budget for the fiscal year 2026-27 is expected to exceed Rs17,000 billion, with the government preparing major tax reforms and revenue measures under commitments made to the International Monetary Fund (IMF).
According to sources, the IMF has been assured that additional tax measures worth Rs860 billion will be introduced in the upcoming budget. Under IMF pressure, the government has also agreed in principle to end subsidies on petrol and diesel.
Sources revealed that the IMF has suggested collecting an additional Rs2,000 billion through General Sales Tax (GST). The target for tax collection in the first six months of the next fiscal year has been set at Rs7,000 billion, while the overall collection target by June 2027 is Rs15,267 billion.
Reports indicate that the public may face an additional financial burden of Rs430 billion in the new budget. Around Rs215 billion is expected to be generated through new taxes, while the remaining amount will be recovered through audits and stricter monitoring. The four provinces are also expected to impose new taxes totaling Rs430 billion.
According to sources, the petroleum levy target has been fixed at Rs1,727 billion, which is Rs260 billion higher than the current fiscal year. Officials say that relief provided to one sector may result in increased financial pressure on other sectors.
Despite previous assurances to the IMF, the government has reportedly failed to effectively collect taxes on agricultural income. The agriculture sector contributes nearly 25 percent to the economy, but tax collection from the sector remains only around 0.3 percent.
Meanwhile, the federal government has also assured the IMF that privatization of state-owned institutions will be accelerated. A plan has reportedly been shared to phase out tax incentives for special economic zones by 2035.
Sources further stated that if the privatization of electricity distribution companies is delayed, the government may consider merging some companies. Plans are underway to sell 51 to 100 percent shares of IESCO, GEPCO, and FESCO by early 2027, along with transferring administrative control to the private sector.
Progress is also being made on the privatization of 27 state-owned entities, while delays in appointing a new financial advisor for the Roosevelt Hotel project have also come to light.
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