The government’s economic team is currently engaged in the second round of negotiations with the International Monetary Fund (IMF) in Islamabad, as both sides work to finalize Pakistan’s federal budget for the fiscal year 2025–26.
A key part of these discussions is the government’s commitment to enforce strict measures against non-filers. Among the proposals on the table is a sweeping ban that would prevent individuals outside the tax net from buying property or vehicles.
Sources familiar with the talks revealed that the Pakistani delegation comprises representatives from the Ministry of Finance, Federal Board of Revenue (FBR), Planning Commission, Economic Affairs Division, and Ministry of Petroleum.
Insiders report that discussions are zeroing in on income and expenditure plans. One significant proposal under review aims to grant income tax exemptions to salaried employees earning between Rs1 million and Rs1.2 million annually. This relief initiative comes under the direction of Prime Minister Shehbaz Sharif.
The FBR has indicated that talks with the IMF are expected to continue until May 23, while internal budgetary decisions should be finalized by May 22.
In accordance with IMF recommendations, the government has pledged to broaden the tax base. The proposed measures would restrict non-filers from making major financial transactions and purchases, including real estate and automobiles.
“There will be no concessions for non-filers in this budget,” stated an FBR official. “In fact, we are working towards removing the non-filer category altogether and implementing even stricter controls.”
Officials also briefed the IMF on the modest outcomes of recent tax initiatives aimed at traders. Despite limited success, withholding tax adjustments for unregistered retailers have produced notable improvements—leading to a 51% rise in registered filers among traders and wholesalers.
To further boost compliance, the FBR has rolled out a Compliance Risk Management System across key cities such as Islamabad, Karachi, and Lahore, with plans to expand to corporate tax units nationwide.
The final phase of policy-level talks will address key areas such as budget projections, tax reforms, and spending targets. The IMF mission is expected to stay in Islamabad until May 22. Additionally, officials from the State Bank of Pakistan are set to join the negotiations in the coming days.
