The International Monetary Fund (IMF) has reportedly agreed to withdraw proposed tax increases on solar panels and stationery items following discussions with Pakistani authorities, according to sources familiar with the budget negotiations for 2026–27.

Sources said the decision came after government-level engagement, including intervention from Prime Minister Shehbaz Sharif, as efforts continued to balance revenue measures with public relief ahead of the new fiscal budget.

The proposed increase in sales tax on stationery items to 18 percent has been dropped, sparing students, schools, and households from an additional cost burden.

Similarly, the plan to raise sales tax on solar panels from 10 percent to 18 percent has also been taken back. The move is expected to support the country’s expanding solar energy market and sustain the adoption of renewable energy systems.

Sources added that taxation on stock market transactions is expected to remain unchanged in the upcoming budget.