After expanding the net, new budget will focus on increasing tax rates

Facing limited room for fresh tax measures, the Shehbaz Sharif-led coalition government has resorted to rebranding taxation — shifting from “broadening the tax base” to pursuing “equity” — in an effort to justify higher taxes on lower-income segments. This transition comes as the government eyes a record revenue target of nearly Rs14 trillion for FY26, a 22 per cent increase over projections for the outgoing fiscal year. Tied to its commitments under the International Monetary Fund (IMF) programme, the government estimates autonomous revenue collection at Rs12.845tr, based on 4.2pc GDP growth and 7.5pc inflation. To meet the ambitious target, the government will need an additional Rs655 billion in new tax measures and another Rs400bn through enforcement — figures expected to be finalised in Tuesday’s cabinet meeting ahead of Finance Minister Muhammad Aurangzeb’s budget speech.