Pakistan to Finalize Budget 2025-26 in Consultation with IMF as Revenue Goals Tighten
The Government of Pakistan is set to enter formal talks with the International Monetary Fund (IMF) to shape and finalize the national budget 2025-26 fiscal year. According to official sources, an IMF delegation is scheduled to visit Pakistan from May 14 to May 22, where it will meet with the Ministry of Finance and key economic institutions to shape the upcoming budget framework.
A major target proposed for the next fiscal year is setting the Gross Domestic Product (GDP) at PKR 130 trillion. At the same time, the Federal Board of Revenue (FBR) aims to generate PKR 14.2 trillion in tax revenues—pushing the tax-to-GDP ratio to 11%, a noticeable rise from the current year’s 10.6% benchmark.
The FBR has been assigned an ambitious revenue goal of PKR 950 billion for May 2025 alone, signaling an aggressive push to meet the growing fiscal needs. Despite efforts, the current fiscal year is expected to close with PKR 11.8 trillion in total tax collection, well below the original target of PKR 12.97 trillion, indicating a potential shortfall of PKR 1.17 trillion.
Authorities estimate that PKR 500 billion could be recovered from pending tax litigation cases. However, failure to recover these dues may result in missing the revised target of PKR 12.33 trillion, creating a further shortfall.
The FBR has already shared detailed projections and targets with the IMF, as upcoming policy negotiations will shape not only revenue planning but also broader economic reforms—including subsidy restructuring, tax base expansion, and potentially new conditionalities under future agreements.
The forthcoming talks are crucial and may serve as a pivot point for Pakistan’s macroeconomic strategy amid evolving domestic and global economic conditions.