PM assigns budget-making role to Ishaq Dar

ISLAMABAD: The federal government has assigned Deputy Prime Minister Ishaq Dar a central role in shaping the upcoming budget after finding the initial work unsatisfactory, while an International Monetary Fund (IMF) mission has also started reviewing proposed tax measures.

An official notification showed that Prime Minister Shehbaz Sharif has formed a committee headed by Dar to review, analyse and present tax policy proposals prepared by the Tax Policy Office under the Finance Division. With the committee’s formation, the responsibility for finalising around Rs215 billion to Rs230 billion in new taxes, as well as any possible tax relief, has effectively been shifted to Dar.

Finance Minister Muhammad Aurangzeb is a member of the committee. Other members are Minister for Economic Affairs Ahad Khan Cheema, Planning Minister Ahsan Iqbal, Minister of State for Finance Bilal Azhar Kayani, Secretary Finance Imdad Ullah Bosal, Federal Board of Revenue (FBR) Chairman Rashid Langrial, FBR member Hamid Atiq, Director General Tax Policy Office Dr Najeeb and Asim Zulfiqar, a senior partner at PwC.

When contacted, Asim Zulfiqar said he had not been consulted before being included in the body and added that if any conflict of interest emerged, he would not participate in its proceedings.

Under Pakistan’s arrangement with the IMF, the government is required to introduce Rs430 billion in measures in the new budget, including at least Rs215 billion in additional taxes and another Rs215 billion through enforcement steps. The government plans to present the budget in the National Assembly soon after the Eid holidays, once it is finalised by both the IMF and Dar.

According to the committee’s terms of reference, it will review tax proposals in light of fiscal sustainability, economic growth, the investment climate and revenue enhancement. It will also examine the legal, administrative and operational feasibility of the proposed measures and assess their likely impact on revenue, industry, exports, investment, inflation and the wider economy.

Enforcement measures committee

The prime minister has also handed responsibility for finalising enforcement measures to a separate committee led by Ahad Cheema, which held its first meeting on Wednesday. The move came after dissatisfaction with the enforcement proposals prepared by the FBR for the 2026-27 budget.

A press statement issued by the Ministry of Economic Affairs said Cheema asked the FBR to improve its proposals. "Ahad Cheema directed the FBR to further refine the proposed measures and ensure that all reforms are practical, technology-oriented and capable of delivering effective results."

The statement said Cheema underlined the government’s commitment to widening the tax base, optimising revenue, improving transparency and modernising tax administration to support sustainable economic growth and fiscal stability.

Members of the enforcement committee include Climate Change Minister Musadik Malik, Adviser to the Prime Minister on Industries Haroon Akhtar Khan, Bilal Azhar Kayani, FBR Chairman Rashid Langrial and Attorney General for Pakistan Mansoor Usman Awan.

Among the proposals discussed were digital monitoring tools and AI-based systems to identify false data in tax returns, improve oversight of under-reporting and curb tax evasion. The target is to raise at least Rs215 billion through these measures to support a tax collection goal of about Rs15.3 trillion for the next fiscal year. Participants also discussed an e-auction system for goods confiscated by customs authorities to improve transparency and efficiency in disposal, according to the press statement.

Cheema also said the government would pursue tax enforcement reforms while keeping economic growth in view and without creating obstacles for the business environment.

IMF mission briefed

Separately, the Finance Ministry said Finance Minister Muhammad Aurangzeb briefed the visiting IMF mission on Wednesday on Pakistan’s macroeconomic outlook, fiscal strategy, reform priorities and the government’s efforts to secure sustainable economic stability and long-term growth.

According to the ministry, the talks covered macroeconomic stabilisation, preparations for the federal budget and the broader reform agenda aimed at strengthening fiscal and external sustainability while supporting sustainable growth.

Both sides also exchanged views on maintaining reform momentum, preserving macroeconomic stability and advancing structural reforms to promote investment, productivity and export-led growth within what the ministry described as a balanced and forward-looking policy framework.

Aurangzeb said recent data showed exports had improved on both a month-on-month and year-on-year basis, indicating greater resilience in the economy and a gradual strengthening of macroeconomic fundamentals. He said that while stabilisation efforts had yielded encouraging results, the government remained aware of structural challenges, particularly external liabilities and the need to accelerate sustainable, export-led growth.

The finance minister reiterated the government’s commitment to deepening reforms to reinforce macroeconomic stability without undermining long-term growth prospects. He also said current policy measures were part of a broader, technically grounded economic transformation strategy endorsed at the highest level.

The IMF mission, led by Mission Chief Iva Petrova, stressed the need to sustain reform momentum, maintain fiscal discipline and move ahead with structural reforms to support durable and inclusive economic growth. The discussions also covered the wider macroeconomic framework, the government’s reform agenda and priorities for the upcoming budget.