Muammar
IBX-Jakarta. The International Monetary Fund (IMF) has advised Pakistani authorities to include agriculture, real estate, and retail sectors in the tax system, as reported by Geo News. This recent request was made during the ongoing assessment of the USD 3 billion stand-by arrangement (SBA), according to Geo News sources on Thursday. The Federal Board of Revenue (FBR) has shared its tax collection plan with the IMF team, and further recommendations from the IMF are expected after a review of the plan.
In discussions, both parties identified potential areas to address financing shortfalls and agreed on additional measures if the FBR falls short of the tax collection target. FBR is contemplating the imposition of a fixed tax on retailers; however, the IMF is hesitant to endorse such a proposal. The IMF has urged Pakistan to establish a timeline with provinces for bringing the agriculture sector into the tax system.
The IMF was briefed on the tax policy and management task force overseen by the tax regulator. The global lender emphasized Pakistan’s need to meet the tax collection target. Ongoing negotiations between Pakistan and the IMF for a staff-level agreement under the USD 3 billion SBA program began on November 2 and are scheduled to conclude on November 15, 2023. If the lender is satisfied with Pakistan’s performance, Geo News reports that a second tranche of $700 million could be disbursed by December.
Delegations from both sides, led by Pakistan’s Caretaker Finance Minister Dr. Shamshad Akhtar and the IMF’s Mission Chief Nathan Porter, have engaged in discussions and one-on-one meetings throughout the week. Earlier, the finance minister ruled out the possibility of requesting an extension or increase in the size of the USD 3 billion SBA program from March to June 2024, maintaining the current size of $3 billion to $3.5-$4 billion. The finance minister, when questioned by The News, categorically stated, “no.”
Source: https://www.business-standard.com/world-news/imf-urges-pak-officials-to-tax-agriculture-real-estate-retail-sectors-123111000048_1.html
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