• Proposes Rs430bn new budgetary measures
• Suggests 18pc hike in petroleum levy target
• Asks provinces to mobilise extra Rs430bn
• Links power tariff relief to BISP
• Sees economic growth at 3.5pc
• Estimates average inflation at 8.4pc
• Seeks hike in BISP payment to Rs18,000 with 40pc population vulnerable
ISLAMABAD: With Rs430 billion in new budgetary measures and an 18 per cent higher petroleum levy, the International Monetary Fund (IMF) has targeted Pakistan’s federal revenues at Rs17.145 trillion for 2026-27, along with a series of administrative and policy measures committed by the government for the federal and provincial budgets to be passed by the parliament.
In its staff report on completion of third review of $7bn Extended Fund Facility (EFF) and second review of $1.4bn Resilience and Sustainability Facility (RSF), the fund has projected total federal revenues for FY27 at Rs17.144tr — over Rs2.03tr higher than the current fiscal year, up 13.5pc.
The report showed that Pakistan had to commit and deliver three major prior actions to make up for slippages on programme benchmarks before the IMF’s executive board finally approved the disbursement of $1.3bn under both facilities. These included Rs136bn lower grants to the provinces, Rs322bn in recoveries following favourable court decisions relating to super tax, and full pass-on of fuel prices after the government’s initial hesitation following the US-Iran war.
This was despite the fact that authorities maintained that, besides those living in absolute poverty and getting social income supports, 40pc of the population was now facing vulnerability. The BISP support would be increased to Rs18,000 in the coming budget, up from Rs14,500 per family at present, the two sides have agreed.
Almost matching commitments worth Rs430bn have been made by the four provinces for additional provincial revenue mobilisation next year. This will take total provincial revenues to Rs1.95tr next year, up from Rs1.264tr expected in FY26. The provinces have committed to deliver these targets through improved collection from general sales tax on services and agricultural income tax. They would then surrender 1.4pc of GDP-equivalent cash surplus — 0.3pc higher than in FY26 — to the Centre. This would work out to be close to Rs2tr against Rs1.46tr provincial surplus in the current year.
The collection target for the Federal Board of Revenue (FBR) has been projected at Rs15.264tr for FY27, about 13.7pc or Rs1.836tr higher than the current fiscal year. Under this annual projection, FBR’s half-year target ending December 2026 has been separately set at Rs7.022tr. This means the IMF expects about 12pc organic revenue growth, based on its estimate of 8.4pc average inflation and 3.5pc economic growth, with the remainder coming from budgetary, administrative, and digital reforms and enforcement measures.
This would be supported by about Rs95bn committed by the government to generate through tax audits in FY27, Rs50bn through monitoring and improvement calculation of liabilities in sales tax and about Rs50bn improved recoveries in tax gap from sugar, cement, tobacco and fertiliser sectors.
