IMF wants Pakistan to impose taxes on agriculture, real estate, retail sectors

Image showing the exterior of the International Monetary Fund building.  - Reuters
Image showing the exterior of the International Monetary Fund building. – Reuters
  • Tax collection plan shared with global lender team.
  • Both sides identified potential areas to bridge the financing gap.
  • IMF has asked for a deadline to bring the agriculture sector under the tax net.

ISLAMABAD: The International Monetary Fund (IMF) has urged Pakistani authorities to bring agriculture, real estate and retail sectors into the tax net during the ongoing review of the $3 billion stand-by arrangement (SBA). geo news Found out on Thursday.

According to Federal Board of Revenue (FBR) sources, the tax collection plan has been shared with the global lender team and the IMF will recommend further measures after reviewing the plan.

During the talks, both sides identified potential areas to bridge the financing shortfall and agreed on further measures if the FBR fails to achieve the tax collection target.

Sources said the FBR is considering imposing a fixed tax on retailers, however, the IMF is reluctant to accept such a proposal.

The lender has sought a deadline from provinces to bring Pakistan’s agriculture sector into the tax net.

The IMF was also briefed on the tax policy and management task force under the purview of the tax regulator, sources said, adding that the global reformer urged Pakistan to achieve tax collection targets.

Senior officials of Pakistan and the IMF are continuing talks to reach a staff-level agreement under the $3 billion SBA program from November 2 and the talks will end on November 15, 2023.

If the lender is satisfied with Pakistan’s performance during the review, the second tranche of $700 million is expected to be disbursed by December.

Acting Finance Minister Dr Shamshad Akhtar and IMF Mission Chief Nathan Porter led delegations from both sides and also held one-on-one meetings during the week.

A day earlier, the Finance Minister had ruled out the possibility of making any request to the IMF to extend the deadline or size of the $3 billion SBA programme.

news To the Finance Minister to know about the time frame of the SBA program from March to June 2024 and any possibility of requesting the IMF to increase the size of the SBA program from the current $3 billion to $3.5-$4 billion. Had contacted. The Finance Minister replied categorically, “No”.

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