Dr. Ali Hasanain

The Pakistani federal government is shifting the burden of Federal Board of Revenue (FBR) collection shortfalls to provinces, relying on levies and untaxed sectors like retail and petroleum to meet fiscal targets. Analysts attribute this to political economy challenges rather than administrative inefficiency, citing political resistance to expanding the tax base.

The 2026-27 budget process in Pakistan is shaped by fragmented lobbying efforts from business groups and external influences like the IMF. Wealth concentration and political noise from influential sectors, such as retailers and solar net-metering users, complicate reforms. Structural weaknesses, including inadequate feasibility studies, hinder effective policymaking.