Islamabad, May 21, 2025: The International Monetary Fund’s (IMF) Director for the Middle East and Central Asia, Jihad Azour, is likely to visit Pakistan later this week. During his visit, he is expected to meet Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb, official sources told.
The visit concides with Pakistan ongoing process of finalizing its federal budget for FY2025-26 in accordance with conditions made under the IMF agreement. One key requirement of the agreement is the timely approval of the budget by the National Assembly.
Sources revealed that discussions currently underway with the IMF are focused on crucial matters such as tax revenue targets, military expenditures, and subsidy allocations. The federal authorities have reportedly allocated an estimated Rs. 2.504 trillion for defense in the next fiscal year, marking an 18 percent increase compared to the current year’s defense budget.
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In a related move, the Federal Board of Revenue (FBR) on Monday submitted its tax-related recommendations for the upcoming fiscal year to the Prime Minister. The proposed revenue target is set around Rs. 14.07 trillion. However, this figure trails the previously agreed goal with the IMF for FY2025–26 by nearly Rs. 240 billion.
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To make up for the gap, the government is considering an increase in the petroleum levy through the Finance Bill 2025, according to sources.
Further, it was disclosed that Prime Minister Shehbaz Sharif has termed the current proposals for income tax relief and super tax reduction for the salaried classto be inadequate. He has directed tax officials to offer more substantial relief to the salaried class following consultations with the IMF.
