Islamabad, Pakistan – Web Desk: The International Monetary Fund has urged Pakistan to abolish all sales tax exemptions and concessions as budget negotiations between the IMF and the Federal Board of Revenue enter the final phase.
According to sources, the IMF mission has demanded the complete withdrawal of all sales tax exemptions as part of broader fiscal reforms aimed at increasing revenue collection and strengthening Pakistan’s tax system.
Officials said three key meetings between IMF representatives and FBR authorities are scheduled to discuss tax collection targets, new revenue measures, and the overall fiscal strategy for the upcoming financial year.
The IMF is reportedly insisting on a tax collection target of Rs15.264 trillion for the next fiscal year, while the FBR is attempting to negotiate a lower target.
Sources added that the IMF has also demanded an additional Rs778 billion in revenue through enforcement measures. Around Rs430 billion in new tax measures are currently under consideration for the upcoming budget, and FBR officials are expected to provide a detailed briefing to the IMF mission.
Meanwhile, the FBR and IMF have reportedly agreed to maintain the tax-to-GDP ratio target at 11.2 percent.
The IMF has also proposed reducing the current sales tax rate from 22.8 percent to 18 percent, while simultaneously removing all exemptions to broaden the tax base and improve compliance.
The ongoing negotiations are considered crucial for Pakistan’s upcoming federal budget and future economic stabilization efforts under the IMF-supported reform program.
