ISLAMABAD: The government has expedited preparations for the Federal Budget 2026–27, with final reviews underway to shape key fiscal proposals in line with conditions set by the International Monetary Fund.
According to sources in the Finance Ministry, the upcoming federal budget is expected to be presented in the first week of June. Officials confirmed that budget formulation is being carried out in consultation with the IMF to ensure compliance with the ongoing loan program.
Among the proposals under consideration is targeted tax relief for the salaried class. Additionally, a gradual reduction in Super Tax is being discussed in coordination with the IMF to ease the burden on taxpayers.
The government is also evaluating a proposal to increase stipends under the Benazir Income Support Programme (BISP) by Rs5,000. If approved, the quarterly payment would rise from Rs14,500 to Rs19,500, providing enhanced support to low-income households.
Sources further revealed that the budget may include the withdrawal of various income tax and sales tax exemptions currently enjoyed by multiple sectors. No new tax exemptions or incentives are likely to be granted, including those for Special Economic Zones (SEZs). In fact, existing tax concessions for SEZs could also be phased out.
In a move aimed at protecting local industries, the sale of finished goods from export zones into the domestic market is expected to be restricted.
Energy sector reforms remain a key focus, with proposals to ensure timely and regular adjustments in electricity and gas tariffs. The IMF has also emphasized stricter implementation of tariff rationalization measures under the loan agreement.
Moreover, the Federal Board of Revenue’s audit system is set to be strengthened and centralized to improve compliance and transparency. The establishment of new economic zones will remain restricted in the upcoming fiscal year.
Sources added that the government plans to gradually ease foreign exchange restrictions and aims to establish the Pakistan Regulatory Registry by 2027 as part of broader economic reforms.
The upcoming budget is expected to reflect a balance between fiscal consolidation and targeted relief measures, as Pakistan continues its engagement with the IMF for economic stability.
