The International Monetary Fund (IMF) has called on Pakistan to intensify tax recovery efforts, emphasizing the need for additional measures in income tax collection from retailers and the real estate sector, sources revealed on Thursday.
According to sources, the IMF has demanded increased income tax recovery on agriculture income and urged the federal government and provinces to collaborate on tax recovery initiatives. The international lender has proposed the imposition of a fixed tax on retailers after December if there is a shortfall in tax collection.
The Federal Board of Revenue (FBR) has been granted the authority to introduce a scheme for the imposition of tax on retailers. Additionally, the IMF has recommended consultations with provinces for imposing taxes on agriculture and real estate sectors.
The IMF mission has provided proposals to the FBR for amendments in the tax policy to address existing flaws and enhance effectiveness. The suggested measures focus on implementing an efficient taxation policy and enforcement in sectors with lower tax recovery.
The FBR has submitted a revenue projection report until the end of the current fiscal year to the IMF team. The IMF mission is expected to respond to the revenue projection report by Saturday, according to FBR sources.
During policy review talks, Pakistan and the IMF reached an agreement to share data of tax evaders through collaboration between the FBR, banks, and NADRA (National Database and Registration Authority). This agreement is part of the efforts to improve tax collection. The agreement was reportedly reached in the context of policy review talks aimed at releasing a $700 million loan tranche under the Standby Agreement (SBA).
