The International Monetary Fund has urged Pakistan to adopt strict measures against trade-based money laundering before announcing the federal budget for fiscal year 2026-27. The Fund raised concerns over suspicious financial activities in trade, banking, real estate and non-financial business sectors, while demanding stronger oversight and faster enforcement actions to improve financial transparency and reduce illegal money flows across the economy.
Moreover, the IMF highlighted weaknesses in monitoring suspicious transactions and stressed the need to improve the exchange of beneficial ownership information. The Fund also asked authorities to strengthen financial supervision and increase suspicious transaction reporting from non-financial businesses. Officials believe these concerns are linked to the growing circulation of untaxed wealth and black money invested through different sectors without proper documentation or regulatory scrutiny.
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Meanwhile, the real estate sector remained a major concern during discussions, as the IMF expressed dissatisfaction over low reporting of suspicious financial transactions. The Fund also described the performance of the DNFBP monitoring system as unsatisfactory despite its establishment by the Federal Board of Revenue to track financial irregularities and send suspicious transaction reports to the Financial Monitoring Unit for further investigation and regulatory action.
In response, the Federal Board of Revenue has intensified investigations into alleged concealed income and launched raids on several housing societies. Authorities are attempting to trace hidden assets, uncover undeclared investments and improve the reporting system for suspicious transactions. Officials believe these measures could help strengthen documentation of the economy while increasing tax compliance and discouraging illegal financial practices in high-risk sectors.
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Furthermore, an IMF delegation is expected to arrive in Pakistan to begin formal budget discussions with economic authorities for the upcoming fiscal year. The negotiations, likely to continue for about a week, will focus on tax targets, fiscal discipline, development spending and broader economic strategy. Both sides are also expected to discuss measures aimed at aligning government expenditures with budget targets to ensure financial stability.
According to officials, the federal budget for fiscal year 2026-27 is being prepared in close consultation with the IMF to meet economic goals and maintain fiscal balance. The government is expected to introduce reforms focused on improving transparency, strengthening financial oversight and increasing revenue collection. Economic managers believe these steps are necessary to stabilize the economy, restore investor confidence and fulfill commitments linked to international financial support programs.