IMF Urges Pakistan To Impose Additional Rs 430 Billion Tax

In order to set a daring objective of “Rs 14.3 trillion” in tax collection for the forthcoming “2025–2026 federal budget”, the International Monetary Fund (IMF) recommended Pakistan to raise tax collections by “Rs 430 billion”, based on government sources.

In-depth talks on income objectives and fiscal policy were the main topics of this recommendation throughout the 2nd round of internet-based talks between the government and the IMF.

The IMF underlined that immediate action is required to expand the tax base, particularly the adoption of better regulations and the requested settlement of court matters related to taxes.

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The Fund suggested that Pakistan establish a tax collection goal of “Rs 14.3 trillion” for the coming fiscal year, with an extra “Rs 430 billion” in taxes to be raised through new taxing mechanisms. This would result in a large increase in tax income.

Collect More Tax

Additionally, the IMF recommended that enforcement efforts alone be used to generate “Rs 600 billion”. The IMF group was informed by Finance Minister Muhammad Aurangzeb on the state of the nation’s economy and the difficulties the government is having collecting taxes.

According to government predictions, tax collection may be restricted to “Rs 13.275 trillion” due to slow growth and ongoing inflation. However, enforcement and policy changes might result in the collection of “Rs1.03 trillion”.

Along with suggesting enhancements to real-time data collecting and processing within the Federal Board of Revenue (FBR), the IMF has also recommended the government to expand documentation of high-potential industries such as tobacco, drinks, and real estate”.

The discussion also included strengthening documentation and monitoring FBR’s production statistics.

As negotiations to release a “$1 billion” loan tranche begin in Islamabad, the International Monetary Fund (IMF) had called for a crackdown on tax fraud in Pakistan’s real estate industry.

Today, Nathan Porter’s (9) member team arrived in Pakistan to evaluate the country’s economic performance in order to decide when to deliver the next “$1 billion” tranche.

According to sources, negotiations between Pakistan and the IMF to provide a “$1 billion” loan tranche under a “$7 billion” credit package have begun. The IMF pressed for action against people who were misreporting property prices throughout the negotiations.