Final Budget 2026-27 package depends on IMF’s approval

ISLAMABAD: The federal government is awaiting the final approval of the International Monetary Fund (IMF) on tax reforms and relief measures in the budget for the upcoming fiscal year 2026-27.

According to sources, the government has proposed tax relaxation in various sectors and increase in some. Under the proposed plan, a reduction in income tax slabs has been proposed for the salaried class.

Similarly, a 2 percent reduction in super tax and a 1 percent advance income tax imposed on exporters are also recommended. Relief is also being considered for the property sector.

On the other hand, talks are underway between the government and the IMF on increasing the general sales tax to 18 percent on solar panels, hybrid vehicles and about two dozen other items.

The government has taken the position that the GST on electric vehicles should be kept low for environment-friendly measures.

All these proposals are under consideration under the IMF’s $1.4 billion program “Resilience and Sustainability Facility”, which aims to bring stability to the energy sector.

According to official sources, the biggest challenge for the government is to balance the tax target of the Federal Board of Revenue (FBR) for the next fiscal year.

This year, the target has been reduced to Rs 13,428 billion, while a new target of Rs 15,264 billion is being considered for next year, for which detailed consultations are being held with the IMF.