Negotiations between the Pakistani government and the International Monetary Fund (IMF) over the upcoming fiscal year’s budget have hit a roadblock, with disagreements persisting on key tax relief proposals. The government has been pushing for a reduction in the super tax and for fiscal relief to the salaried class and the real estate sector — demands the IMF is currently unwilling to accommodate.
Sources familiar with the talks revealed that the IMF remains firm, asking Islamabad to present a detailed fiscal roadmap and reliable economic data before any concessions can be considered. No agreement has been reached on revised fiscal targets, and talks are expected to continue without any formal breakthrough as yet.
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The IMF has also emphasized the need for provincial governments to rein in spending while improving revenue generation. One of the more contentious points remains the enforcement of the agricultural income tax — a measure the IMF considers essential but politically sensitive within Pakistan.
The Federal Board of Revenue (FBR) has reportedly proposed a two-part tax collection target for the new fiscal year, with an overall annual goal exceeding Rs14 trillion. The IMF is also factoring in the potential revenue from pending tax-related court cases, with expectations that up to Rs250 billion could be resolved in favor of the FBR by June 30.
As the IMF continues to scrutinize Pakistan’s fiscal data and strategy, both sides remain locked in difficult negotiations. With the budget deadline approaching, the pressure is mounting on Islamabad to align its plans with the Fund’s requirements while still addressing domestic economic challenges.
