Prime Minister Shehbaz Sharif firmly declined all proposals to introduce a mini-budget or implement new taxes as a solution to the revenue shortfall caused by the economic impact of escalating tensions in the Middle East following the US-Israel conflict with Iran.
He was briefed on various strategies intended to boost tax revenue in response to the evolving regional crisis. However, the prime minister decisively opposed any measures to raise new taxes or increase existing rates before the upcoming federal budget.
Shehbaz Sharif emphasized that the public should not be further burdened with additional taxation, especially as they are already struggling with the effects of rising global oil prices. He instructed officials to prioritize negotiations with the International Monetary Fund (IMF) to seek a reassessment of fiscal targets in light of the ongoing geopolitical tensions.
In a significant development, the prime minister also rejected a proposal to present the federal budget in the last week of May. Instead, he called for comprehensive consultations to revise budget proposals the shifting economic landscape.
Officials have cautioned that key fiscal objectives under the three-year budget framework—including inflation control, fiscal deficit reduction, and current account deficit management—may face considerable challenges due to the regional uncertainty.
Consequently, the budget presentation is now anticipated to take place in the first or second week of June, reflecting the need to accommodate the prevailing geopolitical situation.
