Pakistan has entered a decisive phase of fiscal negotiations as talks with the International Monetary Fund (IMF) begin on the federal budget for 2026–27, with authorities simultaneously restructuring how the budget is being prepared under increasing external and domestic pressure.
In a notable administrative shift, the government has placed Deputy Prime Minister Ishaq Dar at the center of the budget-making process after initial proposals were reportedly deemed insufficient. The move signals a tighter grip on fiscal planning as Pakistan aligns its financial roadmap with IMF requirements.
A high-level committee has been formed under Dar’s leadership to review and refine tax policy proposals prepared by the Tax Policy Office under the Finance Division. The panel includes key figures such as Finance Minister Muhammad Aurangzeb, Planning Minister Ahsan Iqbal, and Minister for Economic Affairs Ahad Khan Cheema, alongside senior bureaucrats.
The committee’s mandate is to evaluate existing proposals and present workable recommendations for the upcoming budget cycle. Officials say the focus is on improving revenue generation while maintaining limited relief in select sectors to balance economic pressures.
In parallel, a separate enforcement committee headed by Cheema has been tasked with strengthening tax compliance and improving revenue collection mechanisms. During its first meeting, the group instructed the Federal Board of Revenue (FBR) to adopt modern digital systems, including artificial intelligence-based tools, to detect tax evasion, under-reporting, and fraudulent filings.
Authorities are targeting approximately Rs15.3 trillion in tax revenue for the next fiscal year. Sources indicate that the government is considering new taxes worth around Rs215 billion, alongside relief measures in selected areas. Under the IMF agreement, Pakistan is required to implement fiscal adjustments worth about Rs430 billion, split between new taxation and enhanced enforcement.
An IMF review mission led by Mission Chief Iva Petrova is currently in Pakistan and is expected to remain until May 20. The delegation has already begun discussions with senior economic officials, including Finance Minister Muhammad Aurangzeb, focusing on budget planning, macroeconomic stability, and structural reforms.
According to official statements, the IMF has emphasized the importance of maintaining reform momentum, fiscal discipline, and long-term structural adjustments to stabilize Pakistan’s economy and support sustainable growth.
The State Bank governor and senior Federal Board of Revenue officials also participated in initial meetings, highlighting the broad institutional involvement in ongoing negotiations.
Officials say the final budget for 2026–27 is expected to be presented in parliament after the Eidul Azha holidays, once domestic consultations are completed and IMF-linked fiscal conditions are finalized.
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