The International Monetary Fund has urged Pakistan to eliminate all sales tax exemptions and shift toward a uniform taxation framework, as discussions on the upcoming federal budget enter their final stage with the Federal Board of Revenue.
According to official sources, multiple rounds of technical-level talks have taken place between the IMF delegation and FBR officials to finalize revenue projections and policy measures for the next fiscal year.
The IMF is reportedly pushing for a tax collection target of around Rs. 15.264 trillion for FY2027, while Pakistani authorities are seeking room to negotiate a lower figure.
In addition to the revenue target, the IMF has proposed approximately Rs. 778 billion in additional enforcement-driven recoveries and nearly Rs. 430 billion in new tax measures for the upcoming budget cycle.
Officials say Pakistan and the IMF have broadly aligned on maintaining the tax-to-GDP ratio near 11.2 percent, though key disagreements persist over the structure of sales tax reforms.
The IMF has recommended removing all categories of sales tax exemptions, reducing distortions across sectors, and applying a single standardized rate system.
It has also suggested lowering the peak sales tax rate from 22.8 percent to 18 percent, while eliminating preferential rates currently granted to specific industries.
