IMF seeks taxes on agriculture, real estate

ISLAMABAD: During the ongoing review of a $3 billion short-term loan agreement, the International Monetary Fund (IMF) has pressed Pakistani authorities to impose a tax on agriculture, real estate, and retail sectors, sources told Geo News Thursday.

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

During the talks, both sides identified potential areas for bridging financing shortfalls and agreed on further measures if FBR failed to achieve the tax collection target.

The sources said FBR is mulling imposing a fixed tax on retailers, however, the IMF is reluctant to accept such a proposal.

The lender has demanded Pakistan seek a timeframe from provinces for bringing the 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 mender urged Pakistan to achieve tax collection target.

Pakistan and the IMF high-ups have continued parleys for striking a staff-level agreement under the $3 billion stand-by arrangement (SBA) programme from November 2 and the talks would conclude on November 15, 2023.

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

Caretaker Finance Minister Dr Shamshad Akhtar and the IMF’s Mission Chief Nathan Porter led the delegations of both sides and also held one-on-one meetings during this week.

A day earlier, the finance minister ruled out the possibility of making any requests to the IMF to increase the timeframe or size of the $3 billion SBA programme.

The News had contacted the finance minister to inquire about any possibility of making a request to the IMF for an increase in the timeframe and size of the SBA programme from March to June 2024 and jacking up the size from the existing $3 billion to $3.5-$4 billion, the minister for finance categorically replied, “no”.