Business
Pakistan, IMF ‘agree’ on major budget targets for FY2026-27
Sources said the federal budget for FY2026-27 was likely to be around Rs18 trillion. Most of the financial issues have been discussed and settled but the virtual negotiations between the Federal Board of Revenue (FBR) and the International Monetary Fund (IMF) are apparently ongoing on ideas to provide relief to the salaried class.
The IMF has agreed to cut the FBR’s tax collection target for the current fiscal year for the second time, sources said.
The revised objective has been decreased to Rs13.005 trillion from Rs13.979 trillion, according to reports. The government is likely to fix a total tax collection target of around Rs15.264 trillion for the next financial year.
The proposed revenue break-up is Rs7.413 trillion from direct taxes, Rs4.727 trillion from sales tax, Rs1.651 trillion from customs duties and Rs1.043 trillion through Federal Excise Duty.
IMF asks Pakistan to broaden tax net, boost revenue collection
Meanwhile, the Petroleum Development Levy (PDL) is projected to continue to be a major source of government revenue. Sources said the target for PDL collections could be boosted to Rs1.727 trillion in the next fiscal year as against Rs1.468 trillion for this year.
Non-tax revenue is likely to be around Rs2,768 billion while petrol surcharge receipts are estimated at roughly Rs151 billion.
On the spending side, debt servicing will probably remain the major budgetary burden on the federal government. Total interest and debt servicing payments are anticipated to be Rs7.824 trillion. Of that, Rs6.652 trillion is for domestic debt and Rs1.107 trillion for foreign debt servicing.
Sources also say the forthcoming budget may propose new taxing measures of around Rs220 billion to help achieve budgetary targets set with the IMF.
Besides, changes in income tax brackets for salaried people are also allegedly on the cards. The government is looking at ways to provide some assistance to taxpayers in the formal sector.
The federal budget will be delivered in the next several days, providing further insight into taxation, spending objectives and economic strategy for the new financial year.
For a three-day period starting on August 1, the government has announced a slight decrease in the cost of petroleum products, including gasoline and high-speed diesel (HSD).
The Petroleum Division said that the price of high-speed diesel has been lowered by Rs0.66 per litre, resulting in a new retail price of Rs392.38 per litre.
Additionally, the price of gasoline has been lowered by Rs0.12 per litre, to Rs336.03 per litre.
According to the letter, the updated pricing will go into effect between August 1 and August 3.
According to the administration, the little cut was taken after accounting for both domestic economic and budgetary factors as well as global oil costs.
In light of persistent economic pressures and swings in the world’s crude oil markets, the most recent adjustment provides customers with little respite.
The most recent update comes after the government regularly reviews fuel costs, which are decided by the currency rate, domestic tax laws, and global market trends.
In July 2026, the Federal Board of Revenue (FBR) collected Rs820 billion in net revenue, exceeding the monthly target by Rs40 billion.
The July tax collection target was set at Rs780 billion, but net receipts came in at Rs820 billion, according to FBR documents.
According to the papers, gross tax collections for the month totaled Rs918 billion. Net receipts were Rs820 billion after Rs98 billion of this sum was reimbursed to taxpayers under different refund categories.
Gross collections under the income tax head was Rs343 billion. Net income tax revenues fell short of the objective of Rs323 billion, coming in at Rs308 billion after the payment of Rs35 billion in refunds.
In July, sales tax collections came to Rs413 billion, while sales tax refunds were Rs53 billion.
The Federal Excise Duty (FED) collected Rs48 billion, compared to the objective of Rs47 billion, according to the FBR.
In July 2026, customs duty receipts totaled Rs115 billion, surpassing the designated objective of Rs105 billion by Rs10 billion.
Foreign investors became net purchasers at the Pakistan Stock Exchange (PSX) for the first time in almost two years, indicating restored confidence in the country’s capital market at the beginning of the current fiscal year.
According to official data, foreign investors invested $34.4 million in the PSX in July 2026, a significant reversal from June 2026 when they sold $180 million worth of shares and pulled money out of the market.
The data showed that foreign investors were net buyers for the first time in nearly 23 months, with banking and exploration companies receiving the greatest investment in the month.
Foreign investors made investments in the banking sector to the tune of $13.8 million during July, while investments in exploration businesses amounted to $6.7 million.
However, the data also revealed that international investors preferred to dispose of cement stocks over the same period.
An earthquake with a magnitude of 4.7 occurs close to Naples, Italy, resulting in damage and disruptions.
For three days, Pakistan lowers the price of petrol and diesel.
FBR surpasses its July revenue goal by Rs40 billion.
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