A major Pakistan tax target agreement has been reached between the federal government and the Pakistan Peoples Party (PPP) following successful negotiations on key fiscal matters ahead of the upcoming budget, sources said.
According to officials, the agreement was finalized during talks held under the supervision of Deputy Prime Minister Ishaq Dar, where both sides discussed revenue sharing and fiscal coordination for the next financial year.
Under the Pakistan tax target agreement, the federal government will receive additional revenue linked to the next fiscal year’s tax target, while the National Finance Commission (NFC) formula for revenue distribution will remain unchanged.
Sources said that instead of altering the NFC structure, provinces will contribute additional funds to the federal government in the form of grants, creating a temporary fiscal arrangement to support budgetary needs.
The revised framework suggests that Pakistan’s tax target for the current fiscal year stands at around Rs13,005 billion, while the upcoming fiscal year target is set at Rs15,264 billion, reflecting an increase of Rs2,259 billion.
As part of the agreement, provinces are expected to collectively provide over Rs1,200 billion in grants to the federal government, which may later be adjusted or returned over time under future arrangements.
Breakdowns indicate Punjab may contribute around Rs620 billion, Sindh around Rs310 billion, Khyber Pakhtunkhwa approximately Rs180 billion, and Balochistan more than Rs85 billion under the new Pakistan tax target agreement structure.
Officials described the understanding as an important step toward stabilizing federal finances ahead of the budget, while maintaining the constitutional framework of revenue distribution.
