ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to further reduce tax exemptions in the upcoming fiscal year 2026-27 budget, with the government considering the withdrawal of several tax concessions as part of broader revenue-enhancement measures, sources said.

According to sources, tax exemptions currently available to the former Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA) are likely to expire on June 30, 2026, with no extension expected beyond that date.

The move is reportedly being considered in line with IMF recommendations aimed at broadening Pakistan’s tax base and increasing revenue collection. Officials estimate that ending the exemptions could generate an additional Rs40 billion in tax revenues.