Negotiations between Pakistan and the International Monetary Fund (IMF) on the preparation of the federal budget for the fiscal year 2025-26 are likely to conclude today, with the final consultation session scheduled for this evening.
The high-level talks, which have been ongoing for several days, aim to finalize critical fiscal measures and targets ahead of the official budget announcement, now scheduled for June 10.
Key reforms proposed by Pakistan
During the discussions, according to sources within the Finance Ministry, Pakistani authorities have tabled several proposals aimed at providing relief to the salaried class and promoting industrial growth. According to sources, the government has suggested:
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Reducing income tax rates for salaried individuals.
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Lowering tax rates on the industrial sector to reduce the cost of doing business and stimulate economic activity.
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Minimizing development and non-development expenditures.
The proposals also include a potential increase in the defense budget for the upcoming fiscal year, a move being closely scrutinized in the context of broader budgetary constraints.
Sources reveal that Pakistan presented the IMF with plans to enhance both tax and non-tax revenue collections. This includes a framework under consideration for agricultural income tax.
Additionally, Islamabad has submitted a strategy to boost provincial revenue generation, as part of a coordinated national effort to improve overall fiscal sustainability.
The finance secretary and senior officials from the Ministry of Finance are leading Pakistan’s delegation, with active participation from Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial and his team.
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