IMF imposes strict conditions on Pakistan’s upcoming Federal Budget 2026

Updated: 12:26 PM PKT — May 27, 2026

The federal government is reportedly considering a 10 percent increase in salaries and pensions for its employees in the upcoming 2026-27 budget. If approved during deliberations, the revised pay structure would take effect from July 2026 to provide relief amid rising inflation.

Separately, an international economic research body, Frontier Economics, has recommended significant tax reductions on mobile phone services. The proposals include cutting the overall sales and turnover tax from 37 to 17 percent, abolishing the 15 percent advance income tax on consumers, and lowering the general sales tax on mobile services to 16 percent. The report argues that reducing the sector’s heavy tax burden would accelerate digitalization and economic growth.

Updated: 11:11 PM PKT — May 26, 2026

Negotiations between Pakistan’s Federal Board of Revenue (FBR) and the International Monetary Fund (IMF) are underway regarding potential tax relief for the real estate sector in the 2026-27 federal budget. Proposals include reducing the withholding tax on property transactions and lowering property valuation rates to revive investment and construction activity. However, officials have clarified that any relief measures require final approval from the IMF.

Separately, the government is also considering introducing a windfall gains tax on oil marketing companies. Revenue generated from this proposed tax would reportedly be used to fund petroleum subsidies, provide electricity tariff relief, and help reduce the fiscal deficit.