Pakistan and the IMF are working on new tax measures to raise an additional Rs. 700 billion in the 2025–26 budget to meet the Rs. 14.3 trillion revenue target. Proposed changes include adjustments to taxes on salaried individuals, tobacco, and beverages. However, the IMF has opposed tax relief for middle-income earners making Rs. 0.2–0.4 million monthly.
In the tobacco sector, the government may raise the Minimum Legal Price (MLP) per cigarette pack from the current Rs. 162.25 while keeping the existing two-tier excise duty structure. Over 80% of cigarette brands currently sell at or below the MLP. Monitoring of tobacco processing at GLT facilities may also be enhanced.
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For beverages, the FBR is resisting tax cuts due to refund risks, which the IMF also flagged. The Finance Ministry projects Rs. 13.556 trillion in baseline revenue, but the IMF estimates Rs. 13.2 trillion—indicating a potential Rs. 300 billion gap. To meet the Rs. 14.307 trillion goal, Rs. 700 billion in new taxes and enforcement will be needed.
The APCC is scheduled to meet on May 26 to finalize budget frameworks.
