Govt eyes ambitious FY27 growth, tax collection targets

ISLAMABAD: The federal government is expected to set an economic growth target of 5.1 per cent and aim for tax collection of more than Rs15.5 trillion in the budget for fiscal year 2026-27, according to finance ministry sources.

The sources said work on the upcoming federal budget is in its final phase, with proposals submitted by different stakeholders currently under review. They said suggestions considered practical are being incorporated into the budget framework.

According to the sources, the budget is being prepared in line with targets and conditions agreed with the International Monetary Fund (IMF) under Pakistan’s programme with the lender. They added that the IMF’s review mission is expected to arrive in Pakistan next month for detailed discussions before the proposals are finalised.

The government is likely to place the budget before parliament in the first 10 days of June, the sources said.

Growth target higher than current year

The proposed GDP growth target of 5.1 per cent would be higher than the 4.2 per cent target set for the current fiscal year, according to the finance ministry sources. However, the sources also noted that the IMF, the World Bank and the Asian Development Bank have all projected lower economic growth than the government’s estimate.

The planned target indicates that the government is seeking a faster pace of expansion in the next fiscal year despite more cautious assessments from international financial institutions.

Revenue goal and tax base expansion

On the revenue side, the government is considering a tax collection target of more than Rs15.5 trillion for 2026-27. For comparison, the tax target for the ongoing fiscal year stands at Rs14.131 trillion.

Despite a downward revision in targets, the Federal Board of Revenue (FBR) has posted a shortfall of Rs610 billion during the first nine months of the current fiscal year, the sources said.

To widen the tax net, the government plans to bring one million additional income tax return filers into the system by June this year. After that, it aims to add another 750,000 filers by March next year, according to the sources.

The proposed measures suggest that the government is placing emphasis on both higher growth and a broader tax base as it prepares the next budget. The budget proposals are also being shaped with IMF-linked benchmarks in view ahead of the lender’s expected review mission.

Finance ministry sources said the consultation and review process is continuing as the government moves toward finalising the budget for the next fiscal year.