IMF Rejects Reduction in Property Transaction Taxes
The International Monetary Fund (IMF) has prohibited the Federal Board of Revenue (FBR) from reducing transaction taxes on Pakistan’s property sector. This contradicts earlier statements from government officials, who claimed the IMF had agreed in principle to cut the withholding tax on property purchases by 2% starting April 1, 2025.
No Tax Relief for Tobacco and Beverages
The IMF has also opposed any reductions in tax rates on tobacco and beverages, maintaining its strict stance on revenue collection.
READ MORE: Israeli Airstrike Kills Senior Hamas Leader Salah al-Bardaweel in Gaza
Provinces Must Avoid Wheat Procurement Amid Shortages
In addition, the IMF has demanded that the federal government provide written assurances that provincial governments will not engage in wheat procurement in case of shortages.
Climate Resilience Fund Under Discussion
The IMF has shown willingness to expand Pakistan’s $7 billion Extended Fund Facility (EFF) by adding climate-related funding under the Resilience and Sustainability Facility (RSF). While the exact amount remains uncertain, reports suggest Pakistan could receive up to $1.2 billion for a Climate Resilience Fund (CRF).
FBR Likely to Miss Revenue Targets
According to IMF Resident Representative Mahir Binci, the IMF has not agreed to lower withholding taxes on property transactions or adjust tax collection targets for March 2025. Consequently, the FBR is expected to miss its Rs. 1,220 billion revenue target for the current month. A proposal has been floated to shift the shortfall to April and May’s targets, rather than June.
