Pakistan is preparing to present its federal budget in the first week of June, with key economic measures already finalized as the government aligns fiscal policy with conditions set under its programme with the International Monetary Fund, officials said.
The budget is being framed to ensure fiscal discipline and compliance with commitments made under the ongoing IMF loan agreement, limiting the government’s room for broad-based relief while prioritising structural reforms.
Relief for salaried class under consideration
Officials said the government is considering targeted tax relief for the salaried class in the upcoming budget. At the same time, the controversial super tax may be reduced gradually, subject to consultations and approval from the IMF.
Any adjustment, officials cautioned, would be phased and closely tied to revenue performance.
Tax exemptions to be withdrawn
As part of wider tax reforms, the government plans to abolish income tax and sales tax exemptions across multiple sectors. No new tax exemptions will be introduced, including for special economic zones, while existing exemptions granted to such zones will also be withdrawn.
Authorities also plan to ban the sale of goods produced in export processing zones in the domestic market. The establishment of new economic zones will remain restricted, reflecting a cautious approach to industrial incentives.
Energy prices to see regular adjustments
Under the new budget framework, regular and timely increases in electricity and gas tariffs will be made mandatory. The IMF has pushed for stricter energy pricing reforms, signalling continued pressure to reduce subsidies and limit fiscal losses in the power and gas sectors.
Increase proposed for BISP stipend
The government has proposed raising stipends under the Benazir Income Support Programme, with payments expected to increase by Rs5,000 — from Rs14,500 to Rs19,500 — subject to available fiscal space.
Officials said future adjustments would depend on budgetary capacity and programme funding.
Revenue and regulatory reforms
The Federal Board of Revenue is set to strengthen and centralise its audit system to improve tax compliance and revenue collection. In addition, a Pakistan Regulatory Registry is planned by 2027 to streamline and digitise regulatory frameworks.
The government also intends to gradually relax foreign exchange restrictions as part of broader economic reforms aimed at improving investor confidence and easing financial flows.
Balancing reform and relief
Officials said the upcoming budget reflects a balancing act between meeting IMF requirements and providing limited relief to citizens. While the measures are intended to stabilise the economy, they also point to tighter fiscal controls and continued structural changes in taxation, energy pricing and regulation.
