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Pakistan Confirms Agricultural Tax Increase, Development Cuts to IMF – SUCH TV
These measures are part of Pakistan’s plan to successfully complete the second review of the $7 billion Extended Fund Facility (EFF) and unlock the third $1 billion tranche, along with the first $200 million tranche under the $1.4 billion Resilience and Sustainability Facility (RSF).
The IMF’s recently released staff report highlights that Pakistan has achieved most targets under the programme, though it projects that the country’s balance of payment gap could widen to $3.253 billion by 2029–30, signaling potential need for another IMF programme in the future.
The report outlines contingency measures the government plans to adopt if revenues fall short by December 2025.
These include raising excises on fertilisers and pesticides by five percentage points, introducing levies on high-value sugary items, and broadening the GST base.
In addition, Islamabad is ready to reduce or postpone spending in response to lower revenues.
Other commitments include full deregulation of the sugar sector, continued tariff adjustments in the power sector, and measures to reduce system losses and costs.
The government will also roll out point-of-sale systems for 40,000 large retailers nationwide over the next two years, while all provinces will move toward harmonised sales tax procedures.
The IMF report notes that, in the current fiscal year, Pakistan will restrict spending on new development schemes to 10% of the PSDP, prioritising completion of ongoing projects worth around Rs2.5 trillion.
From the next fiscal year, greater focus will be placed on climate-related initiatives.
Public procurement is set to transition to digital e-pads, with the Auditor General required to submit a compliance report to the president by March 2026.
Under social protection measures, the Kafalat cash transfer under the BISP programme will rise to Rs14,500 per quarter from January 2026, expanding coverage to 10.2 million families.
Biometric verification for payments will remain mandatory, and the government plans to launch the long-awaited e-wallet system by June 2026.
On energy reforms, the IMF has noted that the government has already decided to shift annual tariff rebasing from July to January 2026. Last fiscal year, the circular debt stock was reduced to Rs1.614 trillion.
By January 2026, the government aims to settle Rs1.2 trillion owed to commercial banks, out of which Rs660 billion will go to Pakistan Private Holdings Limited and the rest to the Central Power Purchasing Agency.
The plan also includes eliminating Rs128 billion in interest payments owed to IPPs and keeping the circular debt at zero inflow until fiscal year 2031.
The Fund highlights that 5.2 million income tax returns were filed in FY2024, while the number is expected to reach 7 million in FY2025.
It acknowledges Pakistan’s progress on stabilisation, noting improvements in foreign exchange reserves, which have risen to $14.5 billion, and a 1.3% primary surplus delivered in FY2025.
Fiscal performance remains strong, with the primary surplus recorded at 1.3%, and the IMF report says this surplus was achieved in line with the programme target.
According to the report, within one year, foreign exchange reserves increased from $9.4 billion to $14.5 billion, and reserves are projected to rise further in the coming years.
The IMF says Pakistan has achieved its first current account surplus in 14 years and terms the primary surplus target for fiscal year 2025–26 achievable. Reforms to increase revenues and reduce debt are described as ongoing.
On inflation, the IMF notes that inflation increased due to food prices following the floods but says this inflationary pressure is temporary. Inflation is projected to ease to 7% in the current fiscal year.
The IMF has stressed maintaining a tight monetary policy to keep inflation under control. It also says exchange rate flexibility is necessary to absorb shocks.
At the same time, the IMF warns that the 2022 floods highlighted Pakistan’s deep climate vulnerability, having affected seven million people and claiming nearly 1,000 lives, while causing extensive losses to infrastructure, homes and livestock.
The report says that following the floods, the importance of reforms and policy continuity has increased further, and it urges stronger climate adaptation measures, improved water management and disaster preparedness.
The global lender has also stressed sustained reforms in taxation, governance, state-owned enterprises and energy to secure long-term growth.
It says Pakistan must widen the tax net, simplify tax procedures, ensure data transparency, and maintain a strict monetary policy to keep inflation stable. Strengthening forex market transparency and reducing policy uncertainty are also essential.
The IMF report adds that progress has been made in improving the power sector through energy tariff adjustments, but further reforms are required to stabilise the sector.
It also notes that improving governance in state-owned enterprises and the investment environment is important, and that trade and investment reforms are essential for sustainable growth.
It says RSF reforms will help improve flood risk management and water governance.
The report concludes that Pakistan’s economic recovery remains fragile but is moving in the right direction under the current programme.
Stronger reforms and consistent policy implementation, it notes, will be critical for lowering debt, raising revenue and sustaining growth in the years ahead.
Business
New Income Tax Act 2025 to come into effect from April 1, key reliefs announced in Budget 2026
New Delhi: Finance Minister Nirmala Sitharaman on Sunday said that the Income Tax Act 2025 will come into effect from April 1, 2026, and the I-T forms have been redesigned such that ordinary citizens can comply without difficulty for ease of living.
The new measures include exemption on insurance interest awards, nil deduction certificates for small taxpayers, and extension of the ITR filing deadline for non-audit cases to August 31.
Individuals with ITR 1 and ITR 2 will continue to file I-T returns till July 31.
“In July 2024, I announced a comprehensive review of the Income Tax Act 1961. This was completed in record time, and the Income Tax Act 2025 will come into effect from April 1, 2026. The forms have been redesigned such that ordinary citizens can comply without difficulty, for) ease of living,” she said while presenting the Budget 2026-27
In a move that directly eases cash-flow pressure on individuals making overseas payments, the Union Budget announced lower tax collection at source across key categories.
“I propose to reduce the TCS rate on the sale of overseas tour programme packages from the current 5 per cent and 20 per cent to 2 per cent without any stipulation of amount. I propose to reduce the TCS rate for pursuing education and for medical purposes from 5 per cent to 2 per cent,” said Sitharaman.
She clarified withholding on services, adding that “supply of manpower services is proposed to be specifically brought within the ambit of payment contractors for the purpose of TDS to avoid ambiguity”.
“Thus, TDS on these services will be at the rate of either 1 per cent or 2 per cent only,” she mentioned during her Budget speech.
The Budget also proposes a tax holiday for foreign cloud companies using data centres in India till 2047.
Business
Budget 2026 Live Updates: TCS On Overseas Tour Packages Slashed To 2%; TDS On Education LRS Eased
Union Budget 2026 Live Updates: Union Budget 2026 Live Updates: Finance Minister Nirmala Sitharaman is presenting the Union Budget 2026-27 in Parliament, her record ninth budget speech. During her Budget Speech, the FM will detail budgetary allocations and revenue projections for the upcoming financial year 2026-27. Sitharaman is notably dressed in a Kanjeevaram Silk saree, a nod to the traditional weaving sector in poll-bound Tamil Nadu.
The budget comes at a time when there is geopolitical turmoil, economic volatility and trade war. Different sectors are looking to get some support with new measures and relaxations ahead of the budget, especially export-oriented industries, which have borne the brunt of the higher US tariffs being imposed last year by the Trump administration.
On January 29, 2026, Sitharaman tabled the Economic Survey 2025-26, a comprehensive snapshot of the country’s macro-economic situation, in Parliament, setting the stage for the budget and showing the government’s roadmap. The survey projected that India’s economy is expected to grow 6.8%-7.2% in FY27, underscoring resilience even as global economic uncertainty persists.
Budget 2026 Expectations
Expectations across key sectors are taking shape as stakeholders look to the Budget for support that sustains growth, strengthens jobs and eases financial pressures:
Taxpayers & Households: Many taxpayers want practical improvements to the income tax structure that preserve simplicity while supporting long-term financial planning — including broader deductions for home loan interest and diversified retirement savings options.
New Tax Regime vs Old Tax Regime | New Income Tax Rules | Income Tax 2026
Businesses & Industry: With industrial output and investment showing resilience, firms are looking for policies that bolster capital formation, ease compliance, and expand infrastructure spending — especially in manufacturing and technology-driven sectors that promise jobs and exports.
Startups & Innovation: The startup ecosystem expects incentives around employee stock options and capital access, along with regulatory tweaks that encourage risk capital and talent retention without increasing compliance burdens.
Also See: Stock Market Updates Today
The Budget speech will be broadcast live here and on all other news channels. You can also catch all the updates about Budget 2026 on News18.com. News18 will provide detailed live blog updates on the Budget speech, and political, industry, and market reactions.
We are providing a full, detailed coverage of the union budget 2026 here, with a lot of insights, experts’ views and analyses. Stay tuned with us to get latest updates.
Also Read: Budget 2026 Live Streaming
Here are the Live Updates of Union Budget 2026:
New Delhi: The Cabinet on Sunday approved the Union Budget 2026-27 during a meeting in Parliament chaired by Prime Minister Narendra Modi. A meeting of the Union Cabinet was held at Sansad Bhawan at 10 a.m., and after the Cabinet’s approval, Finance Minister Nirmala Sitharaman proceeded to Parliament to present the Budget.
Earlier, FM Sitharaman met President Droupadi Murmu and offered her a copy of the digital budget. The President also offered ‘dahi-cheeni’ (curd and sugar) to Sitharaman when she arrived at the Rashtrapati Bhavan. The Finance Minister was seen carrying her trademark ‘bahi-khata’, a tablet wrapped in a red-coloured cloth bearing a golden-coloured national emblem on it.
Minister of State for Finance Pankaj Chaudhary, Chief Economic Advisor Dr V. Anantha Nageswaran, Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal and other officials were seen accompanying the Finance Minister. Sitharaman was set to present her ninth consecutive Union Budget in the Lok Sabha. In 2021, she switched to using a digital tablet to carry the Budget papers, further promoting a modern and eco-friendly approach.
The ‘bahi-khata’ is a red pouch that holds the digital tablet containing the Budget documents. This year, Sitharaman opted for a deep maroon Kanjeevaram saree from Tamil Nadu. The saree featured a deep maroon base with a contrasting border and subtle gold detailing, paired with a yellow blouse.
The Budget is likely to strike a deft balance of sustaining growth momentum and maintaining fiscal consolidation. It also needs to address near-term challenges emanating from unprecedented geopolitical flux, said economists. According to economists, the budget is likely to focus more on capital expenditure, especially in sectors deemed to be strategically important owing to prevailing geopolitical compulsions.
While the FY26 Budget was more tilted towards stimulating middle-class consumption with tax reliefs, the FY27 Budget’s approach to stimulating consumption will be selective, they added.
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