Budget 2026-27: Pakistan plans new taxes to collect 15.3tr in next fiscal year

ISLAMABAD – The federal government has planned to impose new taxes to the tune of up to Rs230 billion to boost its revenue generation in next fiscal year 2026-27. Pakistan has initiated budget preparations for the fiscal year 2026-27 in consultation with the International Monetary Fund (IMF). The responsibility for preparing the upcoming budget has been assigned to Deputy Prime Minister Ishaq Dar. Prime Minister Shehbaz Sharif has constituted a high-level committee under Dar’s leadership, including Finance Minister Mohammad Aurangzeb, Planning Minister Ahsan Iqbal, Minister for Economic Affairs Ahad Cheema, and other senior officials. The committee will review proposals prepared by the Tax Policy Office and submit actionable recommendations. A separate enforcement committee, headed by Ahad Cheema, has also been formed to focus on measures to improve tax collection. In its first meeting, the committee directed the Federal Board of Revenue (FBR) to implement advanced digital and AI systems to curb tax evasion, underreporting, and fraudulent tax filings. Tax Revenue Target The government aims to achieve a tax collection target of approximately Rs 15.3 trillion in the next fiscal year. Sources indicate that the budget may introduce new taxes totaling Rs 215–230 billion, while providing relief to selected sectors. Under the IMF agreement, the government is expected to take fiscal measures amounting to Rs430 billion, divided equally between new tax measures (Rs215 billion) and improved enforcement and tax collection efforts (Rs215 billion). A review mission, led by Evapetrova, met with Finance Minister Mohammad Aurangzeb and Pakistan’s economic team to discuss budget preparations, economic conditions, reforms, and progress in the energy sector and privatization initiatives. The IMF delegation will remain in Pakistan until May 20 to assess budget targets, revenue measures, and ongoing fiscal reforms.