The International Monetary Fund (IMF) has rejected Pakistan’s proposal to offer significant tax relief for Salaried Class in the upcoming budget, arguing that the suggested measures would undermine revenue goals. Pakistan planned to raise the annual tax exemption limit from Rs. 600,000 to Rs. 1.2 million and introduce revised income tax slabs, but the IMF disagrees, urging adherence to its fiscal advice over local arguments.
IMF Mission Chief Nathan Porter outlined four main priorities: achieving the Rs. 14.3 trillion tax target, revising NFC transfers without constitutional amendments, reducing government size, and accelerating privatization efforts.
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Further discussions included a proposal to cut withholding tax on property transactions by 0.5%, changes in sales tax on packaged milk, and a possible excise duty on biscuits — all without final decisions. The IMF also reviewed the removal of tax exemptions for ex-FATA. Budget talks are ongoing virtually from Turkey, with the IMF team scheduled to visit Islamabad soon and finalize discussions by May 23.
