The IMF Budget 2025-26 Pakistan has entered a critical phase as the federal government proposes three new taxation measures to raise Rs36 billion and prevent a breach of the agreed fiscal framework with the International Monetary Fund. These steps come after the government announced a higher-than-planned salary increase for public sector employees and reduced the General Sales Tax on imported solar panels, creating a fresh revenue shortfall that alarmed IMF officials.
IMF Budget 2025-26 Pakistan and Proposed New Taxes
Under the revised Finance Bill 2025-26, the government plans to introduce a 10 percent Federal Excise Duty on day-old chicks in the poultry sector, a move expected to broaden the tax net in agriculture-linked industries. In addition, the tax rate on dividends received by companies from mutual funds earning income from profit on debt will be raised from 25 percent to 29 percent. The third measure involves increasing withholding tax from 15 percent to 20 percent on profit earned from government securities by institutional investors, excluding individuals. Together, these steps form a key pillar of the IMF Budget 2025-26 Pakistan compliance strategy.
IMF Budget 2025-26 Pakistan and IMF Concerns
Despite these proposals, the IMF remains cautious and has raised concerns over the accuracy of revenue estimates prepared by the Finance Ministry and the Federal Board of Revenue. IMF officials have warned that if the numbers fall short, Pakistan may have no option but to introduce a mini-budget during the fiscal year. This uncertainty continues to hang over the IMF Budget 2025-26 Pakistan, increasing pressure on tax authorities to deliver precise revenue calculations.
Related: IMF Sees Wide Gap Between Pakistan’s Export Targets and Projections
IMF Budget 2025-26 Pakistan and Salary, Solar Impact
The IMF has estimated that increasing public sector salaries from 6 percent to 10 percent would cost the exchequer nearly Rs29 to Rs30 billion. At the same time, reducing GST on solar panel imports from 18 percent to 10 percent has lowered expected revenues by Rs6 to Rs8 billion. Combined, these policy decisions significantly widened the fiscal gap, forcing the government to negotiate additional measures under the IMF Budget 2025-26 Pakistan framework.
IMF Budget 2025-26 Pakistan and FBR Strategy
FBR Chairman Rashid Mahmood Langrial briefed the National Assembly Standing Committee on Finance, stating that the proposed Rs36 billion in new taxes is aimed specifically at offsetting the impact of salary increases and solar tax relief. He explained that while total new taxation measures in the budget stand at Rs312 billion, enforcement actions are expected to bring in another Rs389 billion. After adjusting for reduced solar panel taxes, the net revenue impact under the IMF Budget 2025-26 Pakistan is now estimated at Rs339.5 billion.
IMF Budget 2025-26 Pakistan and Parliamentary Approval
The National Assembly committee approved the Finance Bill 2025-26 with select recommendations from both the Senate and NA finance panels. However, a remaining fiscal gap of around Rs35 to Rs36 billion persists, partly due to higher salaries, lower solar taxes, and increased provincial transfers under the NFC Award. This gap keeps the IMF Budget 2025-26 Pakistan under close international scrutiny.
IMF Budget 2025-26 Pakistan and Structural Adjustments
The FBR chairman revealed that six additional taxation options were discussed with the IMF, of which three received approval. Among other structural changes, the government has agreed to impose a uniform 10 percent tax rate on both imported and locally produced raw cotton, ending preferential treatment and aligning domestic taxation with IMF-backed reforms. These measures underline how the IMF Budget 2025-26 Pakistan is reshaping tax policy to secure program continuity and financial stability.
