Pakistan’s budget negotiations for fiscal year 2026-27 have entered a crucial phase as the International Monetary Fund (IMF) has reportedly asked the government to raise an additional Rs500 billion through new taxes measures.
Read More: Pakistan budget 2026–27 eyes heavy taxes
According to reports citing official sources, the demand comes as Islamabad finalises revenue targets and fiscal reforms ahead of the upcoming federal budget announcement. The Federal Board of Revenue (FBR) is expected to introduce several new measures aimed at broadening the tax base and improving documentation of the economy.
One of the key proposals includes the full implementation of a digital invoicing system in the next fiscal year. Officials estimate the move could generate around Rs100 billion in extra revenue by improving sales tracking and reducing tax evasion. From July 1, 2026, only digitally issued invoices are expected to be considered valid for tax purposes.
Authorities are also likely to tighten policies distinguishing tax filers from non-filers. Reports suggest the IMF has asked Pakistan to strengthen efforts to identify non-compliant individuals through digital banking records and financial data analysis.
Sources said the government is also considering expanding the Third Schedule of the Sales Tax Act to include more daily-use products, including infant formula milk, dairy products, cooking oil, and other consumer essentials. This measure is projected to bring in another Rs100 billion.
In addition, a simplified taxation scheme for retailers and shopkeepers is under consideration. The proposal would reportedly apply to businesses with annual turnover between Rs200 million and Rs250 million, with tax assessments linked to electricity bills.
Despite demands from the business community, the government is not expected to abolish super tax immediately, though a phased withdrawal over three years is reportedly being discussed.
Read More: IMF approves $1.2 billion tranche for Pakistan
Economic managers are balancing IMF conditions with domestic concerns over inflation and business costs, as additional taxes could place further burden on consumers and businesses already facing economic pressure. Final budget proposals are expected to clarify the government’s revenue strategy in coming weeks.