Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has said that the Government of Pakistan must obtain approval from the International Monetary Fund (IMF) before implementing any kind of tax-related proposals. This includes any exemptions, reductions in tax rates, or structural changes in the taxation system.
While briefing the Senate Standing Committee on Finance and Revenue, Langrial said that the IMF has agreed to FBR’s proposal to collect Rs389 billion through enforcement measures during the next fiscal year.
The FBR chairman further said that the IMF is closely monitoring Pakistan’s tax collection performance. Weekly meetings will be held between FBR officials and the IMF to assess the outcomes of these enforcement initiatives.
The issue was raised after a private stakeholder highlighted the expiration of the tax exemption granted to Real Estate Investment Trusts (REITs), which ended a year ago.
Chairman Langrial requested time to review the senators’ recommendations, while Finance Minister Muhammad Aurangzeb also endorsed the committee members’ suggestions.
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The Secretary of the Ministry of Commerce informed the committee that the new trade policy proposes four tariff slabs (0%, 5%, 10%, and 15%), intended to support domestic industries.
Finance Minister Aurangzeb told the committee that under the new tariff structure, import duties on raw materials and intermediate goods will be reduced in the first year. This measure is part of an industrial support package aimed at lowering production costs.
He added that previous governments had imposed high import duties to curb imports, but this strategy failed to yield long-term economic benefits.
Chairman Langrial said that in the past, increased tariffs were often used to protect inefficient or inactive industrial units, which reduced market competition and discouraged innovation.
The chairman of the Senate committee emphasized that Pakistan must urgently reduce its production costs, particularly in comparison to regional competitors like India and Bangladesh, where exporters benefit from significantly lower electricity rates.
