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Pakistan assures IMF of more tax collection from real-estate sector: sources

Interim govt says will not introduce mini-budget and new taxes
International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, U.S., October 9, 2016. Photo Reuters
International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, U.S., October 9, 2016. Photo Reuters

Pakistan has assured the International Monetary Fund to collect more taxes from the real-estate section of the country, sources said.

The caretaker government and IMF held policy-level negotiations where the written plan for achieving the tax collection target was handed over to the multilateral lending institution.

During the discussion, the government told the IMF that it will not impose new taxes while showing resolve to achieve the annual tax collection target of Rs9.41 trillion, sources said.

Meanwhile, the IMF has agreed to keep the tax collection target at Rs9.41 trillion for the current year.

The Federal Board of Revenue said that the government will not introduce a mini-budget while assuring the IMF to end tax theft in the real-estate sector.

Further, it was said that the authorities will take measures to increase the tax collection. The authorities were planning to document the economy to increase tax collection.

Earlier, the policy-level discussions between Pakistan and the International Monetary Fund (IMF) for the upcoming tranche valued at $710 million began on Monday.

The policy-level talks come after a round of technical-level talks and are expected to last three days.

Representatives from the Special Investment Facilitation Council (SIFC) will provide the IMF with a briefing on the initial day of the policy-level discussions.

The talks will involve a comprehensive dialogue on the anticipated direct investment through SIFC, with considerations also extending to other matters such as tax concessions related to investments under SIFC.

As per insiders from the Ministry of Finance, Dr Shamshad Akhtar, the caretaker finance minister, will lead Pakistan’s economic team in the policy-level discussions, while Nathan Porter, the head of the mission, will lead the IMF review mission.

Points to be discussed in the meeting

Revenue generation, shrinking expenditures and dollar inflows policy will be the part of talks. The sources revealed that Pakistan will also share its plans such as exchange rate, renewal of loans, T-bill and issuance of investment bonds will come on the table as well.

Furthermore, lifting fuel subsidies amid loan programme and measures to reduce of budget deficit are included in the meeting discussion.

Rebasing, adjustments, and circular debt reduction plans for power sector and petroleum sector will also be discussed.

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