Pakistan-IMF Budget Talks Enter Final Phase Ahead of June 10 Budget Announcement
ISLAMABAD — The ongoing negotiations between Pakistan and the International Monetary Fund (IMF) over the federal budget for the fiscal year 2025–26 are expected to conclude today, with the final consultation session scheduled for this evening, according to official sources.
The high-stakes discussions, which have been underway for several days, are focused on finalizing critical fiscal targets and reform measures ahead of the formal budget presentation on June 10.
Proposed Fiscal Reforms: Relief for Salaried Class, Boost for Industry
Insiders from the Finance Ministry report that Pakistan has proposed a number of reform measures aimed at providing economic relief to the salaried class and fostering industrial growth. Key proposals include:
- Reduction in income tax rates for salaried individuals
- Lower industrial sector tax rates to cut the cost of doing business
- Minimizing development and non-development expenditures to optimize spending
Notably, the proposals also include a potential increase in the defense budget, a move being carefully evaluated amid tight fiscal constraints.
Focus on Revenue Enhancement and Tax Reforms
To address IMF concerns regarding revenue generation, Pakistan has presented a detailed framework to enhance both tax and non-tax revenue streams. This includes:
- Consideration of agricultural income tax as part of broad-based tax reforms
- Provincial revenue enhancement strategies, to ensure greater fiscal sustainability through coordinated national efforts
High-Level Representation in Talks
The Pakistani delegation is being led by the Finance Secretary and includes senior officials from the Ministry of Finance, as well as Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial and his team, who are playing a key role in shaping the fiscal roadmap.
Next Steps
If the final session concludes successfully, the agreed-upon reforms will be reflected in the federal budget 2025–26, which is set to be unveiled before Parliament on June 10. The outcome of these talks is critical to maintaining IMF program continuity and ensuring macroeconomic stability in the coming fiscal year.
