The government and the International Monetary Fund (IMF) are considering introducing a new tax scheme for retailers in the upcoming 2026–27 federal budget, as negotiations between Pakistan and the IMF continue.
Image: The Express Tribune
Sources said discussions also included proposals related to agricultural income taxation, with a plan under consideration to begin registration of farmers for tax compliance purposes.
Setting new targets for tax filers was also part of the discussions, along with broader measures aimed at increasing overall tax revenues.
The IMF has already disbursed around $1.3 billion to Pakistan following the successful completion of key programme reviews. According to the State Bank of Pakistan, the Executive Board completed the third review under the Extended Fund Facility (EFF) on May 8, 2026, approving the release of Special Drawing Rights (SDR) 760 million. An additional SDR 154 million was approved under the Resilience and Sustainability Facility (RSF), bringing total inflows to SDR 914 million.
The funds were received on May 12, 2026, and will be reflected in Pakistan’s foreign exchange reserves for the week ending May 15, 2026.
Meanwhile, an IMF delegation is currently in Islamabad, where detailed negotiations with the Finance Ministry are underway. Talks are focused on budget targets, revenue projections, fiscal reforms, and macroeconomic indicators for the next financial year.
Officials said discussions also cover energy sector reforms, privatisation plans, and broader economic stability measures.
Sources added that Pakistan has projected a primary surplus of 1.3 percent of GDP for the next fiscal year, improving to 1.6 percent in the following year, while the current account deficit is expected to remain at 0.4 percent of GDP before widening slightly to 0.9 percent.
Authorities also briefed the IMF on potential economic risks stemming from regional tensions, including possible oil price volatility, pressure on remittances from Gulf countries, and employment risks for overseas workers.
Officials defended the State Bank’s tight monetary policy, saying it helped control inflation and supported macroeconomic stability, while also clarifying that reserves were strengthened through multiple inflows, not external borrowing alone.
