The International Monetary Fund (IMF) has asked Pakistan to take strict steps against tax evaders. It wants the government to increase its revenue through better tax enforcement and policy reforms. According to sources, the IMF shared several suggestions to control tax evasion and bring more transparency into the tax system. These proposals are expected to shape the upcoming federal budget for 2025-26, which will be presented on June 2.
One of the key suggestions is to raise the penalty for tax fraud through Point-of-Sale (POS) systems. The current fine of Rs 500,000 could go up to Rs 5 million. The IMF also proposed criminal action against serious tax offenders. It recommended increasing the use of technology to catch evaders and make the system more efficient. These steps aim to reduce loopholes and recover unpaid taxes.
Moreover, the IMF wants the government to remove tax exemptions on several items. This includes solar panels, which are currently tax-free. The fund has also advised imposing an 18% General Sales Tax (GST) on fertilizers, sprays, and agricultural tools. In addition, it suggested raising the Federal Excise Duty (FED) on farm equipment and inputs.
The IMF also proposed adding more products to the list of luxury goods. For such items, it recommends raising the sales tax rate above the current 25%. These measures are expected to increase tax collection from high-end consumers. The IMF believes this will help balance the country’s budget and improve economic stability.
Meanwhile, Finance Minister Muhammad Aurangzeb said the government has not yet decided on salary increases for civil and military staff. However, he assured that the upcoming budget will focus on giving relief to the salaried class. Talks between Pakistan and the IMF are ongoing, and many of these proposals could appear in the final budget.