Pakistan and the International Monetary Fund are set to begin discussions on the federal budget for the next fiscal year from Wednesday, as the government moves to finalize its fiscal framework in close coordination with the lender.

According to reports, the IMF team arrived in Islamabad on Tuesday and is scheduled to meet Finance Minister Muhammad Aurangzeb and members of the economic team at the Finance Division. In the first phase of consultations, the IMF staff mission is also expected to hold meetings with State Bank Governor Jameel Ahmad and other key officials.

The talks are expected to focus on revenue targets, tax reforms, expenditure controls, and broader fiscal management measures for the upcoming budget. Officials said the government is considering setting a tax revenue target of more than Rs. 15.3 trillion for the next fiscal year, around Rs. 2 trillion higher than the current year’s collection target.

Discussions are also likely to cover proposals aimed at broadening the tax base, reducing sales tax exemptions, and curbing government spending. The government is expected to consult with the IMF on measures to improve the tax-to-GDP ratio and bring down the debt burden to around 70 percent of the economy.

The government may set a target of 7.5 million income tax return filers in the next fiscal year as part of efforts to widen the tax net.

Officials added that possible tax relief for the salaried class and the corporate sector has been linked to progress in expanding the tax base.

The IMF mission is expected to stay in Pakistan until May 20 for budget-related consultations.

Separate discussions are also underway on the imposition of new taxes worth Rs. 230 billion in the upcoming budget. Officials estimate that around Rs. 700 billion in additional revenue could be generated through new tax measures, while another Rs. 1.3 trillion may come from higher economic growth and inflation-driven gains in tax collection.