Preparations for the Federal Budget 2026–27 indicate significant tax measures and subsidy cuts under IMF-linked commitments.
Sources suggest the financial burden on consumers may increase further amid already high inflation. The total budget size is expected to cross Rs 17,000 billion.
According to official sources, Pakistan has assured the International Monetary Fund (IMF) of additional tax measures worth Rs 860 billion. These steps are part of broader fiscal adjustment commitments.
Reports also indicate that the IMF has set a target of an additional Rs 2,000 billion in GST collection.
Subsidy cuts on fuel expected
Under IMF pressure, it has been decided to stop subsidies on petrol and diesel. This move is expected to have a direct impact on fuel prices.
With inflation already in double digits, concerns are rising that energy and transport costs may increase further in the upcoming fiscal year.
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Sources suggest the upcoming federal budget may exceed Rs 17,000 billion. Around Rs 7,000 billion is expected in the first six months of the next fiscal year.
By June 2027, tax collection targets are projected at Rs 15,267 billion.
New tax burden on public
The Ministry of Finance and FBR are reportedly planning an additional burden of Rs 430 billion on the public.
This includes:
- Rs 215 billion through new taxes
- Rs 215 billion through audits and stricter enforcement
In addition, provincial governments are also expected to introduce new taxes worth Rs 430 billion collectively.
Sources further reveal that petroleum levy collection is expected to reach Rs 1,727 billion, which is Rs 260 billion higher than the current fiscal year.
Authorities suggest that relief for one sector may be offset by increased burden on others, reflecting continued fiscal adjustment pressure.
Agricultural tax gap
Reports highlight that the agricultural sector contributes around 25% to the economy, but tax collection from it remains only 0.3%.
Despite IMF commitments, the government has reportedly struggled to expand taxation in this area.
With inflation already in double digits, experts fear that additional taxes and subsidy removals could further push prices upward in the coming fiscal year.
The overall fiscal strategy appears focused on revenue expansion under external financing conditions.
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