ISLAMABAD: The International Monetary Fund (IMF) has asked the government of Pakistan not to continue subsidies on petroleum products, as initial virtual consultations begin for the preparation of the 2026-27 federal budget.
According to reports, the IMF stressed that timely adjustments in energy and fuel prices are necessary to avoid additional fiscal burden. It also urged immediate implementation of recommendations made by regulatory bodies regarding energy and electricity tariffs.
The IMF further called on Pakistan to keep tax exemptions and concessions to a minimum in the upcoming budget.
Proposals under discussion include widening the tax net, reducing sales tax exemptions, cutting expenditures further, and increasing the tax-to-GDP ratio by at least one percent.
Reports said Pakistan and the IMF are currently working on key fiscal targets for the next budget, while improved global conditions and economic reforms could help the country achieve a medium-term growth target of 5.5 percent in the next fiscal year.
