What happened
Pakistan is considering tax relief for the salaried class and the business community in its upcoming budget despite tight fiscal constraints under its IMF programme, officials and industry leaders said on 31 May 2026.
The budget is expected to be presented in parliament on 5 June after approval by the cabinet, amid concerns stemming from the Iran conflict and pressure to meet IMF reform targets. A finance ministry official told Arab News, on condition of anonymity, that a proposal under discussion would give relief to salaried workers earning between Rs150,000 ($538) and Rs200,000 ($718) a month. “The final decision rests with cabinet which will approve the budget proposals on 5th June ahead of the parliament session,” the official said.
Why it matters
According to the IMF staff report on Pakistan, the lender has set an annual revenue target of Rs15.26 trillion ($54.7 billion) for the Federal Board of Revenue (FBR) in the next financial year, up from Rs13.97 trillion ($50 billion) last year. The finance ministry official said the government wanted to give relief because it carried political mileage but had to keep the annual revenue target in view.
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh said businesses had submitted four key tax relief proposals and that a meeting between top industrialists and Prime Minister Shehbaz Sharif was scheduled for the coming week. He said industry faced an accumulated tax burden of more than 60 per cent on its income and wanted it brought down to at least 40 per cent, and called for the abolition of super tax and for export-oriented industries to be placed under the Final Tax Regime instead of the National Tax Regime introduced in 2024.
A study by Germany’s Friedrich Ebert Stiftung cited in the report found that the salaried class contributed 352 per cent more in taxes than the combined payments of exporters, retailers, wholesalers and distributors. Pakistan has in recent years grappled with high inflation, shrinking foreign exchange reserves, a weakening currency and rising debt; macroeconomic indicators have improved since it secured a $7 billion IMF bailout in 2024.
Sources & reporting notes
This is a summary of published reporting, not independent reporting. Figures and quotations are as carried by the cited outlet. Sources reviewed on 2026-05-31.
- Arab News — "Pakistan weighs tax relief for salaried workers, businesses in budget despite IMF pressure"31 May 2026 · Reports the finance ministry official's account, the IMF revenue target, FPCCI proposals and the Friedrich Ebert Stiftung study.
