The federal government is awaiting IMF approval for several tax measures and relief proposals in the 2026-27 budget. The proposed package includes tax relief for salaried individuals, businesses, and the property sector. The outcome will affect taxpayers, investors, and the government’s revenue targets for the next fiscal year.
According to official sources, the government has proposed reducing income tax slabs for salaried employees. Authorities have also suggested a two percent cut in the super tax and the abolition of a one percent advance income tax on exporters. Additionally, policymakers are considering major incentives for the property sector to stimulate economic activity.
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Meanwhile, discussions continue over increasing the general sales tax on solar panels, hybrid vehicles, and nearly two dozen other items to the standard 18 percent rate. Pakistan has requested the IMF to allow lower sales tax rates on electric vehicles. Officials argue that the concession would support energy efficiency and environmental sustainability goals.
The proposal is linked to Pakistan’s commitments under the IMF’s 1.4 billion dollar Resilience and Sustainability Facility programme. Government representatives maintain that encouraging cleaner transportation aligns with broader energy security objectives. However, negotiations with the IMF remain ongoing as both sides seek agreement on revenue and expenditure measures.
Read more: Tax relief proposals await IMF approval before FY27 budget
Officials also face challenges in setting next year’s tax collection targets. After revising the current fiscal year’s Federal Board of Revenue target to Rs13.428 trillion, authorities are now working with the IMF on a proposed target of Rs15.264 trillion for 2026-27. Analysts say balancing tax relief with higher revenue goals remains one of the government’s most difficult budget tasks.