IMF and Pakistan's Tax Policy — What Changed in FY2026-27
What this page is for: it gives policy context — how the IMF programme and the budget relate to Pakistan's tax policy. It is not a rate reference. For confirmed rates and slabs, see Pakistan Budget 2026-27 Tax Changes.
According to the IMF's website, Pakistan is currently in the IMF's 37-month Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programmes — the IMF Executive Board completed the EFF's third review on 9 May 2026. That does not mean the IMF sets rates directly: rates and slabs are set by Pakistan's Parliament through the Finance Act. The distinction matters, because every budget season brings a wave of “the IMF has imposed this tax” stories that are really only proposals.
1. The FY2027 Revenue Target — From the Budget Documents
The Finance Division's Budget in Brief 2026-27 (Table 5) gives these figures for FBR taxes:
| Figure | Rs billion |
|---|---|
| FY2025-26 budget estimate | 14,131 |
| FY2025-26 revised estimate | 12,983 |
| FY2026-27 budget estimate | 15,264 |
So the FY2026-27 target is about 17.6% higher than the previous year's revised estimate (15,264 ÷ 12,983). It is a budget estimate, not law — actual collection will be known at year end.
2. What the Finance Act 2026 Actually Did
According to the gazette, the Finance Act 2026 (Act No. XLIII of 2026) received the President's assent on 26 June 2026 and has been in force since 1 July 2026. Despite the large revenue target, the salaried class was given relief, not an extra burden.
Confirmed changes (enacted law)
- Salaried slabs changed for Tax Year 2027 — rates above Rs 2.2 million came down, and the 9% surcharge on salaried people (section 4AB) was abolished
- Super tax (section 4C): 8% on income above Rs 500 million; 10% above Rs 150 million for banking companies and for income from oil & gas exploration and fertilizer sales; and no super tax where export proceeds exceed 80% of turnover
- A flat 2.75% advance tax on property sales for ATL filers (section 236C) — the old sliding scale is gone
- Section 7E (deemed rental income) abolished — from 1 July 2026
The detail of all of these, with worked examples, is in the Budget 2026-27 Tax Changes guide. For your exact liability, use the Salary Tax Calculator.
3. The Numbers We Have Not Published — and Why
Older versions of this page carried some figures that were widely reported, but we could not find a primary or independently verifiable source for them. Under our verification standard, we do not publish numbers like these:
Still not published:
- A specific breakdown of federal and provincial additional-tax targets
- Any itemised plan for which measures will close the revenue gap
- The timeline and rates for agricultural income tax
None of these is necessarily wrong — the problem is that we have not yet been able to confirm them from an official document. The question of GST on solar panels has now been confirmed — see the FAQ below.
4. How to Tell a Proposal From the Law
The most common mistake in budget season is treating a Finance Bill proposal as law that already applies. A simple test:
- Finance Bill = a proposal. It is presented in June and is not yet law. It can be changed, and items can be dropped.
- Finance Act = enacted law after the President's assent. It is published in the gazette.
- Before using any rate, check whether it comes from the Act or from news coverage of the Bill. The “18% GST” reports on solar panels are an example: the Sales Tax Act rate for panels is 10%, and the Finance Bill 2026 did not touch that entry.
FAQ
What is FBR's revenue target for FY2026-27?
According to the Finance Division's 'Budget in Brief 2026-27', the budget estimate for FBR taxes is Rs 15,264 billion (about Rs 15.26 trillion). The FY2025-26 revised estimate was Rs 12,983 billion, so the new target is about 17.6% higher. The original FY2025-26 budget estimate was Rs 14,131 billion.
Does the IMF set Pakistan's tax rates directly?
No. Pakistan is in the IMF's Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programmes, and the review documents are published on imf.org. But tax rates and slabs are set by Pakistan's Parliament through the Finance Act — this year, the Finance Act 2026 (Act No. XLIII of 2026).
Did tax on salaried people go up in FY2026-27?
No. The Finance Act 2026 changed the salary table: the slabs up to Rs 2.2 million are unchanged, the Rs 2.2 to 3.2 million rate fell from 23% to 20% and the Rs 3.2 to 4.1 million rate from 30% to 25%, and the single 35% slab above Rs 4.1 million was replaced by three slabs of 29%, 32% and 35%. The 9% surcharge on salaried people above Rs 10 million (section 4AB) was also abolished.
Has 18% GST been imposed on solar panels?
No. The Eighth Schedule of the Sales Tax Act 1990 (Table-1, serial 90) charges 10% sales tax on photovoltaic cells, whether or not in modules or panels (PCT 8541.4200 and 8541.4300). The entry was added by the Finance Act 2025, and the rate is still 10% in the Act as amended to 30 June 2026.
This page used to be about 'Budget 2027' — why has it changed?
The page was written in May 2026, before the budget was presented, and was based mostly on expectations. The budget has now been passed, so the page has been rewritten with confirmed information and policy context.
Related Tax Guides
Continue learning about Pakistan tax with these authoritative FBR-aligned guides.