IMF wants Pakistan to tax agriculture, real estate and retail sectors

• Joint tax collection plan with global lender team.
• Both sides identified potential areas to bridge funding gaps.
• The IMF is looking for a timetable to bring the agricultural sector into the tax net.

ISLAMABAD: The International Monetary Fund (IMF) has urged Pakistani authorities to bring the agriculture, real estate and retail sectors into the tax net during an ongoing review of the $3 billion stand-by arrangement (SBA). Geo News he learned on Thursday.

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

During the talks, both sides identified potential areas to bridge funding gaps and agreed on further measures if the FBR fails to meet the tax collection target.

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

The lender asked Pakistan to seek a timeline from the provinces to bring the agriculture sector into the tax net.

The IMF was also briefed on the tax policy and management task force under the tax regulator, sources said adding that the global regulator urged Pakistan to meet the tax collection target.

Senior officials of Pakistan and the IMF have resumed talks to reach a staff-level agreement on the $3 billion SBA program since November 2, and the talks will 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 IMF mission chief Nathan Porter led delegations from both sides and also held one-on-one meetings during this week.

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

The news had contacted the finance minister to inquire about any possibility of a request to the IMF to increase the timeframe and size of the SBA program from March to June 2024 and increase the size from the existing $3 billion to $3 billion; 5-4 billion dollars, The Minister of Finance answered categorically “no”.