Pakistan is in ongoing talks with the International Monetary Fund (IMF) to finalize the budget framework for the next fiscal year. According to government sources, no strict conditions have been agreed upon yet. However, Pakistan has shared all required economic data with the IMF and is answering follow-up questions related to budget targets and economic reforms.
Sources revealed that Pakistan is seeking tax relief across several sectors to help with economic recovery. The government has asked the IMF to consider easing tax burdens in key areas, including some industries affected by inflation and slowed growth. However, the IMF will decide on granting such relief after fully reviewing Pakistan’s data and proposed strategies.
So far, the IMF has not rejected any of the proposed tax concessions. However, no negotiations have been held yet regarding tax relief for the real estate sector. Discussions on that matter may begin soon, as Pakistan prepares further proposals.
The IMF has also expressed concern over the slow pace of privatization of state-owned enterprises. It has specifically raised the issue of Pakistan International Airlines (PIA) and urged the government to remove all delays. In response, Pakistani officials assured the IMF that the national airline’s privatization would be completed within this year.
Additionally, the IMF has demanded a reduction in provincial expenditures to manage the fiscal deficit. It has also asked provinces to boost their revenue collection. The IMF is also pressing for the effective implementation of agricultural income tax, aiming to broaden the tax base and improve fiscal stability.