Tax slab reduction proposed for salaried class, government awaits IMF approval for relief measures

ISLAMABAD: The federal government is awaiting IMF approval for the implementation of taxes and relief measures in the budget 2026-27.

The government has proposed a reduction in the tax slab for the salaried class, a 2 percent reduction in super tax, elimination of one percent advance income tax on exporters and major relief for the property sector.

However, talks are underway to increase the general sales tax on solar panels, hybrid vehicles and about two dozen other items to the standard rate of 18 percent.

Pakistan has requested the IMF to keep the general sales tax rate on electric vehicles low to ensure environment-friendly and energy-saving.

This request has been made to ensure energy security under the $1.4 billion IMF program under the “Resilience and Sustainability Facility”.

Top government sources have confirmed to The News that after reducing the FBR’s tax target for the current fiscal year ending June 30, 2026 to Rs13,428 billion, it is now becoming increasingly difficult for the government to manipulate the figures to increase the tax collection target to Rs15,264 billion for the next fiscal year 2026-27 in collaboration with the IMF.