IMF urges Pakistan to expand tax net, improve revenue collection

ISLAMABAD: The International Monetary Fund (IMF) has urged Pakistan to expand its tax base and improve tax collection as discussions continue over the country’s upcoming fiscal framework, according to officials from the Ministry of Finance.

Sources said virtual negotiations between Pakistan and the IMF will continue in the coming days as part of preparations for the federal budget 2026–27. The talks are focused on setting key fiscal targets and policy priorities for the next financial year.

The IMF reportedly emphasized that the State Bank of Pakistan should maintain a tight monetary policy stance in order to keep inflation under control.

According to an official statement, the discussions also reviewed progress on reforms in the energy sector, state-owned enterprises, and broader financial restructuring. Climate financing, power subsidy reforms, and disaster risk management frameworks were also part of the agenda.

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The impact of ongoing geopolitical tensions in the Middle East on Pakistan’s economy was also assessed during the consultations.

The IMF delegation has concluded its scheduled visit after completing discussions with Pakistani authorities.

In its recommendations for the next tranche, the IMF has sought Pakistan’s three-year macroeconomic framework and reiterated the need to broaden the tax net and strengthen revenue collection mechanisms.

Officials said Pakistan has reaffirmed its commitment to maintaining a primary surplus target of 2 percent of GDP by 2027. The primary balance target for the upcoming fiscal period has also been set at around 2 percent of GDP.

Authorities further noted that the impact of changes in energy pricing will remain under close monitoring.

The next IMF review mission is expected in the second half of 2026.