The International Monetary Fund (IMF) has reportedly rejected the government’s proposal to reduce income tax rates for salaried class, according to local media sources. The IMF warned that such a move could exacerbate the country’s existing tax shortfall.
In its response, the IMF emphasized the need to strengthen revenue collection and urged the government to mobilize an additional Rs70 billion through improved enforcement mechanisms. This follows the Fund’s earlier decision to reject Pakistan’s request for tax relief on property transactions.
Earlier, the IMF has also declined to support proposals aimed at lowering electricity tariffs and easing taxes on tobacco and sugary beverages. These rejections have added further complexity to ongoing negotiations.
The IMF has underscored the necessity for Pakistan to present stronger commitments before a staff-level agreement can be reached.
