Prime Minister Shehbaz Sharif has asked the International Monetary Fund (IMF) to allow a cut in next year’s tax target. The government wants to reduce the Federal Board of Revenue’s (FBR) target by Rs250 billion for fiscal year 2025–26. The proposed target is Rs14,057 billion, instead of the earlier Rs14,307 billion. Officials say this change is needed to avoid adding new taxes.
FBR officials shared concerns with the IMF during recent talks. They warned that tax collection is already lower than expected this year. So far, a Rs1,170 billion shortfall is likely due to slow growth and lower inflation. Therefore, they believe a higher target next year could lead to failure and more financial pressure.
To support revenue without new taxes, the FBR also gave another idea. It wants to allow imports of used cars up to five years old. This could increase customs revenue through higher import duties. The plan is part of the government’s efforts to improve income without hurting ordinary people.
These talks are happening alongside discussions on a new Extended Fund Facility (EFF) with the IMF. The IMF has asked Pakistan to raise Rs430 billion through new taxes. But the government is trying to avoid this by offering other ways to increase revenue.
In short, the government wants to balance growth and revenue without creating more burden. It hopes the IMF agrees to a lower target and supports flexible solutions. These decisions are key to keeping Pakistan’s economy stable while protecting people from extra taxes.