Pakistan commits new tax measures for FY2026-27 under IMF program

Pakistan has committed to new tax policy and administrative measures in fiscal year 2026-27 to boost revenue collection and meet targets agreed with the International Monetary Fund (IMF), according to program documents.

The measures are expected to generate additional revenues equivalent to 0.3% of gross domestic product (GDP).

What tax measures has Pakistan committed to under the IMF program?

Pakistan will implement a combination of permanent tax policy changes and revenue administration reforms in FY2026-27. Authorities plan to reduce income tax and sales tax expenditures to generate revenues equal to 0.15% of GDP.

The remaining 0.15% of GDP will come from the Federal Board of Revenue's ongoing transformation program.

What is Pakistan's IMF revenue target for FY2026-27?

Pakistan expects to collect PKR 7.022 trillion in revenues by the end of December 2026. That target will be elevated to a formal quantitative performance criterion under the IMF program from December 2026 onward.

Analysts said this reflects the IMF's intention to closely monitor Pakistan's progress on tax reforms and revenue collection throughout the fiscal year.

The commitment comes as Pakistan works to strengthen revenue mobilization under the Fund-supported reform program aimed at restoring fiscal sustainability and reducing budget deficits. Any revenue loss from potential tax simplification measures announced in the FY2026-27 federal budget will be offset through new permanent tax policy measures with equivalent revenue-generating impact.

What is Pakistan's Medium-Term Revenue Strategy?

The government also reiterated its commitment to implementing the Medium-Term Revenue Strategy, a broader tax reform framework designed to expand the tax base, improve compliance, and modernize tax administration.

The IMF has placed increased emphasis on Pakistan's revenue performance as the country pursues a significantly higher tax collection target in FY2026-27. Meeting these benchmarks is central to maintaining macroeconomic stability and program compliance.