The federal government is preparing major fiscal measures in the upcoming FY2026-27 budget aimed at increasing tax revenues and fulfilling commitments made under Pakistan’s program with the International Monetary Fund.
According to official documents, the government plans to reduce income tax and sales tax exemptions as part of broader efforts to strengthen revenue collection. The move is expected to generate additional revenues equal to 0.15 percent of the country’s GDP.
Authorities are also counting on reforms within the Federal Board of Revenue to bring in another 0.15 percent of GDP through improved tax administration and enforcement measures.
The combined impact of tax policy adjustments and administrative reforms is projected to raise revenues by 0.3 percent of GDP during the next fiscal year.
Documents further reveal that Pakistan has assured the IMF that additional tax measures could be introduced if revenue collection falls below official targets during FY2026-27.
The government may implement new permanent tax measures in case collections remain weaker than expected. The upcoming federal budget is also likely to include further reforms recommended by the IMF to broaden the tax base and improve revenue administration.
Officials said the FBR’s revenue targets for the next fiscal year are based on expectations of higher collections through both policy changes and stronger enforcement efforts.
Under the ongoing reform roadmap, the FBR is targeting additional revenue collection of Rs. 7.022 trillion by December 2026 through expanded enforcement, tax policy reforms, and modernization of the tax administration system.
