Pakistan Likely to Increase Reliance on Indirect Taxes in FY2026-27

ISLAMABAD: Pakistan is expected to increase its reliance on indirect taxation during the upcoming fiscal year 2026-27, which begins on July 1, as the government seeks to boost revenue collection and meet fiscal targets.

According to official budget documents, the government has proposed setting the indirect tax collection target at Rs9.837 trillion for the next fiscal year.

The proposed target represents an increase of Rs957 billion compared to the estimated indirect tax collection for the current fiscal year ending on June 30, 2026.

Officials expect indirect taxes to remain a key source of government revenue, reflecting ongoing efforts to strengthen tax receipts amid growing expenditure requirements and fiscal challenges.

The budget proposal indicates that the higher target is part of broader plans to improve revenue generation and support economic management objectives in the coming financial year.

The government’s final revenue strategy and taxation measures are expected to be formally unveiled as part of the federal budget for FY2026-27.