ISLAMABAD: The International Monetary Fund (IMF) has proposed a tax target of more than Rs 15,000 billion in the federal budget for the new fiscal year 2025-2026 and there is also a fear that Pakistan will get new targets. According to Finance Ministry sources, the IMF is likely to include new conditions in the Memorandum of Economic and Financial Policy (MEFP) regarding the agreement of the staff level for the next tranche of one billion dollars to Pakistan. He said that with regard to the real estate sector, the IMF has agreed in principle to reduce the rate of withholding tax imposed on the purchase of property by 2 percent from April 2025 at the request of the Federal Board of Revenue (FBR). The rate of withholding tax imposed on sellers will remain unchanged. In this regard, Finance Ministry sources said that virtual negotiations are underway between Pakistan and the IMF, in which there is a possibility of the IMF imposing more stringent conditions for the one billion dollar installment and there is also a possibility of Pakistan getting new fiscal targets.
According to sources, the government may have to face the financial structural benchmark in the new fiscal year, and new targets are likely to be given in the new budget to increase tax revenue.
Finance Ministry sources further said that the targets may take final shape in online discussions, the final situation will be clear in the virtual negotiations between Pakistan and the IMF.
They said that measures to prevent tax evasion were also discussed with the IMF and it has been proposed to keep the tax target above Rs 15,000 billion in the new budget.
According to sources, discussions are underway to increase the tax-to-GDP ratio to 13 percent in the next budget, and there was also discussion on collecting Rs 2,745 billion in non-tax revenue in the new budget for the next fiscal year.
Sources in the Finance Ministry further said that economic growth is likely to increase to more than 4 percent in the next fiscal year.
