The federal government is awaiting approval from the International Monetary Fund (IMF) for a package of tax relief measures ahead of the 2026-27 budget, while simultaneously negotiating new revenue-generating proposals to meet ambitious tax collection targets.
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According to officials, the proposed relief package includes reductions in income tax slabs for salaried individuals, particularly middle-income earners, a two-percentage-point cut in the Super Tax, and the withdrawal of a one percent advance income tax on exporters. The government is also seeking incentives to revive activity in the property sector.
Sources said authorities have proposed lowering transaction taxes on property purchases and sales for tax filers, although the IMF has reportedly insisted on retaining a minimum tax rate to ensure documentation and transparency within the sector.
“Pakistan’s economic managers are awaiting the International Monetary Fund’s approval for a package of proposed tax relief measures and fresh revenue-raising initiatives ahead of the 2026-27 federal budget.
Among the key proposals under discussion are lower income tax slabs for…
— Mehtab Haider (@haider_mehtab) June 8, 2026
At the same time, discussions are underway regarding an increase in the General Sales Tax (GST) on several products currently enjoying reduced rates. Policymakers are considering raising GST to the standard 18 percent rate on solar panels, hybrid vehicles and nearly two dozen other goods as part of efforts to increase revenue.
Pakistan has also requested the IMF to continue concessional GST rates for electric vehicles, arguing that the policy supports energy efficiency, environmental goals and commitments under international sustainability programmes.
The negotiations come as the Federal Board of Revenue (FBR) faces the challenge of significantly increasing tax collection in the next fiscal year. Officials estimate that revenue targets for FY27 could exceed Rs15 trillion, requiring a substantial increase from expected collections in the outgoing fiscal year.
The IMF has reportedly encouraged the government to reduce tax exemptions and concessions while broadening the tax base to improve fiscal stability. However, authorities are seeking a balance between revenue generation and providing relief to taxpayers and businesses.
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The outcome of the ongoing discussions is expected to shape key taxation measures in the federal budget, which will determine the extent of relief and new taxes for the upcoming fiscal year.