The International Monetary Fund (IMF) has in principle a partial reduction in the tax rate of property purchases, after an application of the Federal Income Board (FBR).
The new rate, which will be reduced by two percent, will be established in force in April 2025. However, the tax rate imposed on property vendors will remain unchanged.
According to the sources, a recent virtual meeting between Pakistani officials and the IMF concluded with an agreement to reduce the federal special tax rate for property buyers. However, the property sellers tax will still be collected at the existing rate.
In addition, the IMF also agreed to a reduction of RS60 billion in the tax revenue objective by March 2025, as requested by the FBR.
The sources indicated that this development would pave the way for consensus on the memorandum of economic and financial policies (MEFP) and an agreement at the personnel level, which is expected to end next week.
With regard to tax reduction in property transactions, FBR had previously requested the IMF that decreases tax rates for both buyers and sellers by senors by virtue of sections 236c and 236. However, the IMF only agreed to reduce the tax rate for buyers under section 236 by two percent.
In addition, the IMF has allowed the Government to raise PKR 1,257 billion banks to address the problem of circular debt in the electricity sector.
