Islamabad: Pakistan and the International Monetary Fund (IMF) have initiated discussions on the budget for the fiscal year 2026–27. The government has assigned Deputy Prime Minister Ishaq Dar to oversee the budget preparation after initial efforts were deemed unsatisfactory.
Prime Minister Shehbaz Sharif has established a high-level committee led by Dar to scrutinize and improve tax policy proposals developed by the Tax Policy Office under the Finance Division. This committee also includes Finance Minister Muhammad Aurangzeb, Planning Minister Ahsan Iqbal, Minister for Economic Affairs Ahad Khan Cheema, along with other senior officials.
The committee’s mandate is to evaluate the proposals thoroughly and present feasible recommendations for the upcoming budget. Meanwhile, a separate enforcement committee, chaired by Cheema, has been created to supervise initiatives aimed at enhancing tax compliance and boosting revenue collection.
In its inaugural meeting, the enforcement committee instructed the Federal Board of Revenue (FBR) to implement advanced digital technologies, including artificial intelligence tools, to detect tax evasion, under-reporting, and fraudulent tax returns.
The government aims to collect approximately Rs15.3 trillion in tax revenue for the next fiscal year. Discussions are underway to introduce new taxes amounting to roughly Rs215 billion, while also providing relief measures in selected sectors. Under the IMF agreement, Pakistan is obligated to enforce fiscal measures totaling about Rs430 billion, split evenly between new taxes and improved enforcement and compliance efforts.
Currently, an IMF review mission, headed by Mission Chief Iva Petrova, is present in Pakistan and is expected to remain until May 20. The initial meeting with Finance Minister Aurangzeb and the economic team covered topics such as budget preparation, macroeconomic stability, fiscal reforms, and agendas related to energy and privatization. The session also included the State Bank governor and senior FBR officials.
During the discussions, the IMF delegation stressed the need to sustain reform momentum, uphold fiscal discipline, and implement structural adjustments to ensure long-term economic stability and growth.
Officials indicated that the budget is likely to be presented in parliament after the Eidul Azha holidays, once final approvals are secured in line with IMF conditions and domestic consultations are completed.
