IMF Sets Rs17.1 Trillion Federal Revenue Target for Pakistan by FY27

ISLAMABAD: The International Monetary Fund (IMF) has set a federal revenue target of Rs17.145 trillion for Pakistan for the fiscal year 2026-27, contingent on the government implementing Rs430 billion in new budgetary measures and an 18 per cent increase in the petroleum levy.

According to an IMF staff report, Pakistan made commitments on three prior actions to secure the recent $1.3 billion disbursement. These included reducing provincial grants by Rs136 billion, recovering Rs322 billion from super tax-related court decisions, and fully passing on fuel price adjustments. These steps were taken despite authorities noting that 40 per cent of the population faces vulnerability, leading to an agreement to increase Benazir Income Support Programme (BISP) payments from Rs14,500 to Rs18,000 per family in the upcoming budget.

Provincial governments have also committed to mobilizing an additional Rs430 billion in revenue next year, aiming for a total of Rs1.95 trillion through improved collection of GST on services and agricultural income tax. This will enable them to provide a cash surplus equivalent to 1.4 per cent of GDP to the federal government. The Federal Board of Revenue’s (FBR) collection target is projected at Rs15.264 trillion for FY27, supported by organic growth and new tax measures.

Key fiscal projections for the next year include a Rs100 billion increase in defence expenditure to Rs2.665 trillion and interest payments rising to Rs7.8 trillion. The Public Sector Development Programme is projected at Rs986 billion. The IMF has estimated Pakistan’s external financing needs for the next year at $21.2 billion, with available financing projected at $21.9 billion.

Pakistan has also committed to a series of policy reforms, including timely adjustments of power and gas tariffs to ensure full cost recovery, with subsidies for low-income consumers channelled through BISP. The government has pledged to cap power sector subsidies at Rs830 billion and reduce the circular debt flow to net zero. Further undertakings include adopting a national sugar policy to end government commodity operations, strengthening the National Accountability Bureau’s autonomy, and phasing out incentives for special economic zones by 2035.

Sources: Source