Overview
- The federal FY27 budget is due in early June and is being written to meet IMF programme targets with a strong emphasis on revenue collection, including an ambitious FBR tax target of about Rs15.3 trillion.
- The Federal Board of Revenue is negotiating with the IMF to lower withholding tax rates on property transactions under sections 236C and 236K, but any change will require IMF sign-off.
- Prime Minister Shehbaz Sharif has created a seven-member budget committee and Finance Minister Muhammad Aurangzeb is leading a high-powered panel to review price-differential claims and probe a possible Rs72 billion recovery from Oil Marketing Companies.
- Major business groups — FPCCI, LCCI and the Pakistan Textile Council — have submitted shadow budgets demanding tax relief, faster refund payments, higher PSDP spending and exporter support to ease liquidity pressures.
- The budget is being prepared against a fragile fiscal backdrop: circular debt in energy of about Rs5 trillion, large public and external debt, high interest rates and delayed tax refunds that squeeze exporters and households and limit scope for broad relief.