More Than 400 Billion Rupees in Additional Taxes Requested from Pakistan Provinces Under IMF Program

The Pakistan federal government has requested provinces to collect more than 400 billion rupees in additional taxes in the 2026-27 fiscal year as per agreements with the IMF...

Scraper SystemMay 26, 2026, 02:52 AM

The Pakistan federal government, in line with agreements reached with the International Monetary Fund (IMF), requested provinces to collect more than 400 billion rupees in additional taxes in the 2026-27 fiscal year. These additional tax targets include increased collections in various sectors, primarily agriculture, services, and real estate. Approximately 200 billion rupees additional targets were set for Sindh province, 175 billion for Punjab, 45 billion for Khyber Pakhtunkhwa, and 20 billion rupees for Balochistan. Under the IMF program, provinces are expected to generate additional revenue equivalent to 0.3% of Gross Domestic Product, approximately 430 billion rupees, while the federal government plans to increase taxes by a similar amount. Thus, the total tax revenues of the federal and provincial governments are projected to exceed 1.1 trillion rupees. The Federal Board of Revenue (FBR) aims to contribute about 430 billion rupees through additional tax measures, with 260 billion rupees expected from petroleum taxes. The FBR has started sharing income and sales tax return data to support provincial tax collection. According to IMF reports, provincial revenues are expected to rise from at least 1.2 trillion rupees in the current fiscal year to approximately 1.65 trillion rupees by 2027. However, recent reports indicate this figure could reach 1.95 trillion rupees. Meetings requested Sindh province to increase tax collection from the real estate and agriculture sectors. Sindh collected 21.4 billion rupees in stamp duty in the first nine months of the current fiscal year, while Punjab collected 38 billion rupees during this period. Punjab province also reported plans to expand the services sales tax to 40 major cities and collected 244 billion rupees in the first nine months. The IMF noted that the increase in provincial revenues exceeds nominal GDP growth, attributed to the expansion of sales tax on services and tightened collection measures. However, agricultural income tax collections fell short of expectations due to implementation delays and audit difficulties. Although the agriculture sector accounts for 24.6% of the country's value added, it bears an effective tax burden of only 0.3%, making it one of the least taxed sectors. The finance minister requested provinces to coordinate closely with the IMF in budget preparations and stated that policy changes that could undermine program commitments would be avoided. The federal government targets a primary surplus of 2.8 trillion rupees, equivalent to 2% of GDP, in the 2027 fiscal year. Interest payments are expected to exceed 7.8 trillion rupees. Additionally, efforts continue to cover an approximately 1 trillion rupee revenue shortfall caused by lower-than-expected FBR collections through tightened collection measures, increased petroleum taxes, and reduced federal development expenditures.

More Than 400 Billion Rupees in Additional Taxes Requested from Pakistan Provinces Under IMF Program

The Pakistan federal government has requested provinces to collect more than 400 billion rupees in additional taxes in the 2026-27 fiscal year as per agreements with the IMF...