Tax relief likely for salaried class in budget for FY-2026-27
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ISLAMABAD – The federal government is awaiting approval from the International Monetary Fund (IMF) on key proposals related to tax relief for the salaried class as it finalises the budget for fiscal year 2026-27. The official sources said that the federal government is in the final stages of budget preparation; however, several major tax proposals and relief measures are still subject to IMF approval before implementation. The sources said Islamabad has shared a set of proposals with the global lender aimed at providing relief across various sectors while introducing adjustments to the existing tax structure. Among the key proposals under consideration are a reduction in income tax slabs for salaried individuals, a proposed 2 percent cut in the super tax rate, and the withdrawal of 1 percent advance income tax currently imposed on the export sector. The government is also reviewing incentives for the real estate sector to stimulate investment and improve economic activity. At the same time, discussions are underway regarding potential tax increases on selected goods. Officials are reportedly consulting the IMF on proposals to raise the General Sales Tax (GST) to 18 percent on solar panels, hybrid vehicles, and more than 20 other product categories. Separately, the government has requested a lower tax rate for electric vehicles as part of its broader policy to promote environmentally friendly transport and support climate-related objectives. Officials said the proposal is also linked to the $1.4 billion Resilience and Sustainability Facility programme. Sources further stated that revenue mobilisation remains a major challenge. The Federal Board of Revenue (FBR) has set a revised collection target of Rs13,428 billion for the current fiscal year, while a higher target of Rs15,264 billion is being considered for the next fiscal year. The officials added that the detailed negotiations between Pakistan and the IMF are continuing over multiple fiscal options to balan