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Federal Government Proposes New Tax for Medical Complex in Islamabad
The federal government plans to impose a new municipal tax in Islamabad to fund a Rs 213 billion medical complex. The government seeks IMF approval and may release Rs 30 billion from emergency funds to fast-track the project.
MH
by Muhammad Hashir
2025-09-12
Federal Government Proposes New Tax for Medical Complex in Islamabad

The federal government has announced plans to impose a new municipal tax in Islamabad to fund a massive medical complex project, costing Rs 213 billion. The move comes amid ongoing financial challenges, with the government looking for alternative funding mechanisms to ensure timely completion of the project.

Details of the Medical Complex Project

The proposed medical complex is expected to be a state-of-the-art facility, aimed at providing advanced healthcare services. The project will be built in Islamabad, and sources indicate that the federal government is hoping to complete it within the next three years.

To fund this ambitious plan, the government is considering imposing a municipal tax on residents and businesses in Islamabad. In addition to seeking IMF approval for the tax, the government is also exploring various other funding sources, including emergency funds and potential profits from Panda Bonds worth $76 million.

Request for IMF Approval and Financial Strain

Sources indicate that the federal government has already sought permission from the International Monetary Fund (IMF) to impose the new tax. However, the IMF has requested additional details regarding the government’s proposal.

The medical complex is set to cost Rs 213 billion, and the government has provided Rs 3.5 billion to begin the project, which will be used for the establishment of the Jinnah Medical Complex Company and staff recruitment. However, financial constraints are preventing the timely completion of the project, and the government is now considering using Rs 30 billion from the emergency fund to cover initial costs.

Minister Ahsan Iqbal’s Statement

Federal Minister for Planning, Development, and Special Initiatives, Ahsan Iqbal, spoke about the project, stating that he would propose funding from outside the Public Sector Development Program (PSDP). This indicates that the government is exploring non-traditional funding avenues to expedite the project.

Background on Funding for National Highway N-25

This proposal comes on the heels of a previously announced plan to use funds saved from the decline in global oil prices for the construction and improvement of the National Highway N-25, connecting Quetta to Karachi. While the government has made progress in this regard, the medical complex is now a high priority, with the government seeking to accelerate its development to address Pakistan's growing healthcare needs.

Next Steps

With the government moving forward with the proposal for the medical complex, the timeline for the tax imposition and approval from the IMF will be crucial. The development of the medical complex could play a major role in improving healthcare access in the country, but the financial challenges and the new tax proposal may generate mixed reactions from the public.

 
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