Islamabad: The federal government has approved a set of tax policy, enforcement, and administrative measures for the upcoming fiscal year 2026–27, expected to generate PKR 400–500 billion, following discussions with the International Monetary Fund (IMF).
Officials said the approved package will be implemented from July 1, 2026, subject to parliamentary approval.
As part of the reforms, the government plans to further differentiate between filers and non-filers through digital systems, with increased reliance on banking data to broaden the tax base. Prime Minister Shehbaz Sharif has directed the Federal Board of Revenue (FBR) to ensure effective use of data to target non-compliant taxpayers and improve enforcement.
Authorities said greater integration of banking information will be introduced, replacing manual reporting with online access to a centralised database, enabling real-time monitoring under enforcement measures. These actions are expected to generate around PKR 100 billion in additional revenue.
The government also plans to implement a fully digital invoicing system from July 2026, making electronic invoices mandatory while discontinuing manual sales tax invoices. This measure is expected to generate another PKR 100 billion.
In addition, the expansion of the Third Schedule of the Sales Tax Act is planned, including selected fast-moving consumer goods (FMCG) such as ketchup, infant formula, milk and dairy products, and cooking oil. This is projected to generate a further PKR 100 billion.
Officials further said a simplified taxation scheme for retailers and shopkeepers with annual turnover up to PKR 250 million is under consideration, where tax would be assessed based on electricity consumption. Tier-I retailers will remain outside this scheme.
The government is also considering withdrawal of the capital value tax (CVT) on foreign assets, although a final decision has not yet been made. The CVT was introduced in 2022 at 1% annually on overseas assets.
Meanwhile, the super tax will remain in place in the upcoming budget, but authorities plan a phased withdrawal over the next two to three years.
Officials confirmed that tax on inter-corporate dividends will also be retained in FY2026–27.
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