The IMF dismissed Pakistan’s claim that higher tax rates result in lower revenues, urging officials to rely on its expert advice rather than local circumstances. It also raised concerns over the Revenue Division’s proposal to reduce taxes for salaried individuals, according to the Express Tribune.
Pakistan proposed doubling the annual tax exemption threshold from Rs. 600,000 to Rs. 1.2 million and introducing new income tax slabs of 10%, 25%, 33%, and 35%, alongside revised brackets—a move the IMF opposed.
IMF mission chief Nathan Porter outlined four key priorities: meeting the Rs. 14.3 trillion tax target, revising NFC transfers without constitutional amendments, reducing government size, and pushing privatization.
Following talks with the IMF, support for the real estate sector appears limited. A proposal to reduce withholding tax on property deals by 0.5% is under consideration. While the FBR wants it treated as a final tax, the finance minister favors keeping it adjustable.
Discussions were also held on lowering the 18% sales tax on packaged milk to 15–17%, but no final decision was made.
A proposed federal excise duty on biscuits was debated without consensus, and talks continue over ending the tax-free status of ex-FATA.