Pakistan Proposes Over Rs. 15 Trillion Tax Target to IMF for FY26

The first economic review of Pakistan’s $7 billion bailout arrangement, along with discussions on the disbursement of the next $1 billion loan tranche, is ongoing between Pakistan and the International Monetary Fund (IMF), with a focus on the current fiscal year’s performance and targets for the next fiscal year. Sources told ProPakistani that the IMF has emphasized the need to increase revenue and reduce expenditures. For the next fiscal year, the government has proposed setting a tax revenue target exceeding Rs. 15 trillion, with the tax-to-GDP ratio expected to rise to 13%. Non-tax revenue is estimated to reach Rs. 2.745 trillion in the upcoming fiscal year. The Ministry of Finance anticipates that economic growth will surpass 4% in the next fiscal year, while growth for the current fiscal year is expected to remain limited to 3.5%, according to sources. Inflation is also projected to remain in single digits next year, providing some relief to the public. Pakistan will require over $20 billion in external financing for the next fiscal year, sources disclosed. Deposits from friendly countries are expected to be rolled over once again. During the talks, the IMF was also briefed on the government’s rightsizing measures aimed at reducing the burden on the national exchequer. As part of the rightsizing measures, the government has permanently abolished 150,000 vacant positions in public institutions, sources said. The IMF was assured that further steps would be taken to reduce the burden on the national treasury. Employees in various departments will be offered voluntary retirement packages, with a plan to pay dues to surplus employees under a golden handshake scheme. The government also assured the IMF of its intention to amend the Civil Servants Act 1973 to facilitate the elimination of redundant positions.