Work is underway on proposals for the federal budget for the new fiscal year 2026-27, with officials considering a 5.1% economic growth target and a tax collection target of more than Rs15,500 billion.
The proposals come as Pakistan waits for the International Monetary Fund Executive Board to approve its economic review and release the next loan tranche.
Work on proposals for the federal budget for the new fiscal year 2026-27 is in progress. According to sources, the government is considering setting the economic growth target for the next fiscal year at 5.1%.
The proposal is higher than the GDP growth target set for the current fiscal year.
The GDP growth target for the current fiscal year was set at 4.2%.
However, the IMF, World Bank and Asian Development Bank have predicted that Pakistan’s economic growth will remain below the target. Their estimates place the expected growth rate between 3% and 3.6%.
Despite these lower projections, the government is considering a 5.1% GDP growth target for the next fiscal year.
Tax target may exceed Rs15.5tr
Sources said the tax collection target for the next fiscal year is proposed at more than Rs15,500 billion. The current fiscal year’s tax target was initially set at Rs14,131 billion.
Even after the target was revised, the Federal Board of Revenue faced a shortfall of around Rs610 billion to Rs611 billion in the first nine months.
Despite missing the revenue target in the current fiscal year, officials are proposing a higher tax target for the next fiscal year.
Govt plans to expand tax return base
The government is also working to increase the number of income tax return filers. The target is to add another one million income tax returns by June this year. Another 7.5 million returns are expected to be added by March next year.
Officials believe expanding the tax return base will be important for meeting next year’s ambitious revenue target.
IMF board schedule released till May 4
The IMF has released the schedule of its Executive Board meetings until May 4. However, the date for the approval of Pakistan’s economic review has not yet been fixed. The IMF mission has submitted the third economic review report to the Executive Board.
Finance Ministry officials are hopeful that the IMF Executive Board meeting on Pakistan will be held in the first week of May. They expect approval of the next tranche of $1.2 billion for Pakistan.
Officials said most IMF targets have been met, strengthening hopes for the release of the next installment.
Economic planning tied to IMF review
The pending IMF approval remains important for Pakistan’s economic planning and budget preparations. Officials are working on the FY2026-27 budget while also waiting for clarity on the IMF review timeline.
The next tranche, if approved, is expected to support Pakistan’s external financing position and strengthen confidence in the country’s economic programme.
