Islamabad opens early consultations with business groups as Fund and government remain apart on FBR targets
Key Takeaways
- The IMF’s expected FBR target of Rs15.564 trillion for 2026-27 is Rs330 billion higher than what Pakistan is asking for — and this year’s target is already likely to be missed.
- Finance Minister Aurangzeb has pre-emptively consulted PBC, OICCI, and APTMA to build a business coalition before the IMF mission arrives in May.
- Pakistan’s relief wishlist for the Fund includes super tax cuts, salaried class tax relief, and withdrawal of withholding taxes where refund backlogs have become a business liability.
ISLAMABAD — With less than two months before the federal budget is due, Pakistan is navigating a delicate balancing act: satisfying IMF conditions while pushing back on tax targets its own machinery cannot realistically meet — and doing so against a backdrop of regional conflict that has already driven up the cost of doing business.
According to a report published by The News International on Thursday, the IMF is expected to dispatch a mission to Pakistan in May 2026 specifically to finalise the budget framework for fiscal year 2026-27. The report, filed by senior correspondent Mehtab Haider, places the Fund’s expected FBR tax collection target at Rs15.564 trillion — a figure that Pakistani budget makers are already quietly resisting.
The tension is significant. The News report notes that domestic tax authorities are unlikely to collect even this year’s target of Rs13,979 billion, yet the IMF is projecting an even higher bar for next year. Islamabad’s preferred figure, according to the same report, is Rs15.232 trillion — a gap of over Rs330 billion that will likely sit at the centre of May’s negotiations.
The government has not waited for the mission’s arrival to begin lobbying. The News reported that Finance Minister Muhammad Aurangzeb has already held preliminary discussions with the Pakistan Business Council and the Overseas International Chamber of Commerce and Industries, signalling that Islamabad is building a private sector coalition ahead of IMF talks. Meanwhile, the minister of state for finance met separately with textile lobby APTMA, whose members have raised alarm over surging logistics and freight costs linked to regional instability.
Two specific relief measures are understood to be on Pakistan’s request list for the May mission. The News report cited FBR’s desire for meaningful cuts to the super tax and income tax burden on salaried workers — both politically contentious levies that have drawn sustained criticism from business groups and middle-income earners alike. The government is also preparing a case for the partial withdrawal of withholding taxes, focusing specifically on those where unclaimed refunds have piled up, creating a liquidity problem for businesses rather than a revenue gain for the state.
The early start to budget consultations, the report suggested, reflects not just fiscal pressure but the changed regional environment following recent conflicts — a factor that has complicated both revenue projections and expenditure planning for the coming year.
