Upcoming Budget to Include New Taxes Under IMF Recommendations
The federal government is preparing a new budget expected to exceed Rs. 17 trillion that will include significant new fiscal measures. As part of its negotiations with the International Monetary Fund, the government has reportedly given assurances to impose an additional Rs. 807 billion in taxes. A decision has also been made to eliminate subsidies on petrol and diesel, which is likely to cause further price increases in the next fiscal year. While a proposed tax hike on tobacco and beverages has been deferred for now, the overall budget is expected to trigger a new wave of inflation.
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Updated: 6:39 PM PKT — May 16, 2026
The International Monetary Fund is reportedly pushing for broader structural reforms, including greater transparency and improved governance in state-owned enterprises. An IMF report also highlighted Pakistan’s narrow tax base as a major economic risk. The report suggested that improving tax collection could substantially boost national revenue.
Updated: 5:52 PM PKT — May 16, 2026
The government’s additional tax target has reportedly been revised upward to Rs. 860 billion. Further IMF demands include the privatization of power distribution companies by 2027. Meanwhile, the government has decided to defer a proposed tax increase on life-saving medicines.
