Negotiations between Pakistan and the International Monetary Fund (IMF) over the 2025–26 federal budget have hit a deadlock, with major differences emerging on tax relief proposals.
Government officials have urged the IMF to ease the super tax and extend tax relief to salaried individuals and the real estate sector. However, the IMF has declined to accept these suggestions without firm commitments and detailed fiscal planning.
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Sources familiar with the discussions revealed that the IMF is unwilling to approve any concessions until it receives comprehensive data and a credible economic framework. No agreement has yet been reached on revised fiscal targets or tax policy adjustments.
The IMF has also recommended that provincial governments lower their spending while finding new ways to boost their revenues. A long-debated proposal to impose agricultural income tax remains one of the contentious points in the talks.
The Federal Board of Revenue (FBR) has tentatively set its collection goal for the next fiscal year at over Rs14 trillion.
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This includes projected income from court cases related to taxes, which could bring in Rs770 billion. Of these, about Rs250 billion are expected to be recovered by June 30, while Rs500 billion may be collected next year depending on court decisions.
An official involved in the talks said the IMF is carefully analyzing Pakistan’s fiscal data and plans, seeking assurance that any relief measures will not undermine revenue targets. Talks are expected to continue in the coming days.