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IMF Rejects Pakistan’s Request to Cut Property Transaction Taxes
The IMF has rejected the FBR’s request to lower tax rates on property transactions. It has also refused reductions in tobacco & beverage taxes. Meanwhile, Pakistan moves towards a staff-level agreement with the IMF.
ND
by News Desk
2025-03-24
IMF Rejects Pakistan’s Request to Cut Property Transaction Taxes

The International Monetary Fund (IMF) has rejected Pakistan’s request to reduce tax rates on property transactions, marking another setback for the Federal Board of Revenue (FBR).

IMF’s Firm Stance on Tax Reforms

According to IMF Chief in Pakistan, Maher Banchi, the organization has not agreed to any reductions in tax rates for the property sector, nor has it approved adjustments to the March 2025 tax targets.

Previously, senior FBR officials had claimed that the IMF had agreed in principle to a 2% reduction in withholding tax on property buyers from April 1, 2025, subject to a formal written approval. However, the latest IMF statement confirms that no such agreement has been made.

This decision follows the IMF’s earlier refusal to reduce tax rates on tobacco and beverages, reinforcing its commitment to maintaining strict revenue collection measures in Pakistan.

Pakistan-IMF Staff-Level Agreement & Wheat Procurement Conditions

Despite this setback, Pakistan and the IMF are progressing towards a staff-level agreement for further financial assistance. However, the IMF has imposed a new condition, requiring Pakistan to provide a written assurance that provincial governments will not interfere in wheat procurement.

Climate Finance & Resilience Fund

The IMF has shown willingness to integrate climate finance into the existing $7 billion Extended Fund Facility (EFF). This will be channeled through the Resilience and Sustainability Facility (RSF), potentially offering Pakistan financial support for climate-related projects.

Conclusion

While Pakistan seeks economic relief and reforms, the IMF remains firm on maintaining strict tax collection policies. The government's next steps in balancing fiscal discipline with economic growth will be crucial for securing further financial stability.
Tagged:

IMF

PakistanEconomy

PropertyTax

WheatProcurement

TaxPolicy
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