Islamabad: The International Monetary Fund (IMF) has declined the Federal Board of Revenue’s (FBR) request to reduce transaction taxes on property deals, maintaining its stance on revenue collection targets.
Earlier, senior officials claimed that the IMF had agreed in principle to lower the withholding tax on property purchases by 2% starting April 1, 2025, pending formal approval. However, the IMF has now clarified that it has not consented to any reduction in transaction taxes for the real estate sector.
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This decision follows the IMF’s previous refusal to lower tax rates on tobacco and beverages. Meanwhile, Pakistan and the IMF are progressing toward a Staff Level Agreement (SLA), with the IMF requiring written assurances that provinces will refrain from wheat procurement.
The Fund has also shown willingness to supplement the ongoing $7 billion Extended Fund Facility (EFF) with additional climate financing under the Resilience and Sustainability Facility (RSF). While the exact amount is yet to be confirmed, sources suggest up to $1 billion may be allocated for the Climate Resilience Fund (CRF).
Read: FBR faces PKR 600bn shortfall, IMF declines tax cut proposals
Pakistan’s Finance Minister Muhammad Aurangzeb expressed optimism last week about finalizing the SLA soon. However, concerns remain over revenue collection as the FBR anticipates a shortfall of Rs60-80 billion in March due to extended Eid holidays. Officials have proposed adjusting this shortfall in April and May’s targets instead of June, when higher collections are expected.