IMF refuses Pakistan’s demand for reduced taxes on property

ISLAMABAD: Pakistan’s efforts to secure key tax breaks from the International Monetary Fund (IMF) have hit a roadblock, as the global lender has reportedly rejected several requests aimed at easing the country’s financial burden.

Sources familiar with the situation revealed that the IMF refused to lower taxes on property transactions, a move Pakistan was hoping would provide some economic relief.

In addition to this, Islamabad’s plea to cut withholding tax by 2 per cent and grant tax relief on items like tobacco and beverages was also turned down. The IMF’s strict stance on these issues is making it more difficult for the country to meet its financial targets, particularly with no agreement on relaxing revenue targets for March 2025.

This means Pakistan will now have to come up with more assurances and provide additional guarantees to move forward with the IMF’s financial support programme. Another condition imposed by the IMF is that provinces should not intervene in wheat procurement, further tightening the control over the country’s economic policy.

On a brighter note, there is some flexibility as the IMF has shown interest in supporting Pakistan’s climate-related projects, offering financial aid through a separate facility.

With key tax cuts denied, Pakistan faces growing pressure to enforce tough financial measures, while trying to meet the IMF’s requirements to unlock the next round of funding.