Negotiations between Pakistan and the International Monetary Fund (IMF) on the federal budget for fiscal year 2026-27 have entered the final stage, with significant discussions focused on tax reforms and revenue targets.
According to sources, the IMF has asked Pakistan to increase the General Sales Tax (GST) rate from the current 18 percent to 19 percent in an effort to boost revenue collection.
Under initial budget estimates, the government is also considering increasing the overall budget size for the next fiscal year from Rs15.1 trillion to Rs15.5 trillion.
Sources said the tax collection target for the current fiscal year has been revised down to Rs13.005 trillion. However, despite the reduction, the IMF is pushing for a tax revenue target of more than Rs15 trillion for the upcoming fiscal year.
Economic experts believe these demands could increase financial pressure on Pakistan, while the government continues efforts to strike a balance between raising revenue and providing relief to the public.
The ongoing talks are expected to conclude in the coming days, with final proposals likely to be incorporated into the budget documents before the federal budget for 2026-27 is finalized.
