ISLAMABAD (PEN) : The federal budget for Pakistan’s fiscal year 2025-26 is expected to be presented in Parliament on June 2, 2025, with a proposed outlay of around Rs20 trillion. This announcement comes as the government prepares its financial plan amidst ongoing consultations with the International Monetary Fund (IMF) and other key stakeholders.
IMF Approval Strengthens Budget Confidence
Sources within the Ministry of Finance have confirmed that the IMF has given its approval to Pakistan’s budget priorities. The global financial institution has expressed satisfaction with the fiscal strategies laid out by the government, particularly in the areas of tax revenue targets set by the Federal Board of Revenue (FBR), and measures to address subsidies, circular debt, and debt repayments.
This approval from the IMF is significant, as it enhances Pakistan’s financial position in its ongoing 37-month Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) agreements with the IMF. These agreements are expected to bring disbursements of \$1 billion and \$1.4 billion, respectively, in May 2025, offering critical financial support.
Key Meetings and Economic Overview
In preparation for the budget’s presentation, Pakistan will release the *Pakistan Economic Survey for 2024-25* on June 1, offering a comprehensive assessment of the country’s economic performance over the past year. Additionally, the *Annual Plan Coordination Committee (APCC)* will meet on May 26 to finalize the budget’s annual targets.
Further consultations will take place in the *National Economic Council (NEC)* meeting, which is expected to be held on May 31. This meeting will be chaired by Prime Minister Shehbaz Sharif, with participation from the chief ministers of all four provinces.
Potential Changes in Taxation: Capital Gains Tax on Real Estate
Among the proposed adjustments in the upcoming budget, one notable consideration is an increase in the *Capital Gains Tax (CGT)* on real estate transactions. Sources indicate that the government is exploring a significant hike in CGT, potentially raising the rate from the current 15% to as high as 35%. This adjustment would align real estate taxation with corporate sector rates, aiming to tap into the sector’s untapped revenue potential.
Looking Ahead
As Pakistan moves closer to presenting the budget, the financial measures are expected to reflect the country’s commitment to managing its fiscal challenges while navigating its international financial obligations. With the IMF’s approval, the government is poised to implement strategies that aim to stabilize the economy and address key structural issues, including debt and revenue generation.
The upcoming budget will undoubtedly be a pivotal moment in Pakistan’s economic trajectory, as it addresses pressing financial issues while positioning the country for future growth.
