PM Shehbaz hands budget review to Ishaq Dar as IMF scrutinises tax proposals

Prime Minister Shehbaz Sharif has assigned Deputy Prime Minister Ishaq Dar the responsibility of reviewing and finalising budget proposals for the fiscal year 2026-27 after concerns emerged over the quality of initial tax recommendations prepared by the Tax Policy Office, The Express Tribune reported, citing an official notification.

Under the notification, Dar will head a committee tasked with reviewing and recommending tax policy proposals prepared by the Tax Policy Office under the Finance Division. Finance Minister Muhammad Aurangzeb has also been included as a member of the committee.

The decision to place Dar in charge of tax policy proposals and Ahad Khan Cheema at the head of the enforcement committee indicates that key budget-making responsibilities have shifted outside Q Block, the seat of the Finance Ministry, with major fiscal decisions now being reviewed through committees led by senior cabinet members.

According to sources, the committee will oversee finalisation of between ₨215 billion and ₨230 billion in additional taxes, along with decisions on possible tax relief measures in the upcoming budget.

Pakistan has committed under its International Monetary Fund programme to introduce around ₨430 billion in fiscal measures in FY27, including at least ₨215 billion in new taxes and another ₨215 billion through enforcement and compliance actions.

The government has separately constituted an enforcement committee led by Minister for Economic Affairs Ahad Khan Cheema to finalise measures aimed at improving tax collection and compliance.

Members of the Dar-led committee include Planning Minister Ahsan Iqbal, Minister of State for Finance Bilal Azhar Kayani, Secretary Finance Imdad Ullah Bosal, Chairman FBR Rashid Langrial, FBR member Hamid Atiq, Director General Tax Policy Office Dr Najeeb and Asim Zulfiqar of PwC.

According to the committee’s terms of reference, it will assess proposed tax measures in the context of fiscal sustainability, economic growth, investment climate and revenue generation. The committee will also evaluate the legal, administrative and operational feasibility of proposals and examine their potential impact on industry, exports, inflation and the broader economy.

Sources said the prime minister decided to establish the committee after the Tax Policy Office failed to satisfy him regarding the rationale behind proposed budget measures during multiple briefings.

Meanwhile, Ahad Cheema chaired the first meeting of the enforcement committee on Wednesday and directed the Federal Board of Revenue to further refine its proposals.

According to a statement issued by the Ministry of Economic Affairs, the proposed enforcement measures include digital monitoring systems and artificial intelligence-based tools to identify false declarations in tax returns, improve detection of under-reporting and curb tax evasion.

Participants also discussed introducing an electronic auction system for confiscated customs goods to improve transparency and efficiency in disposal procedures.

The government plans to present the federal budget in the National Assembly after Eid holidays once discussions with the IMF are finalised.