The International Monetary Fund (IMF) has declined Pakistan’s request to reduce taxes on property transactions, sources familiar with the negotiations revealed on Monday.
The refusal comes as Islamabad struggles to fulfill the conditions necessary for securing a staff-level agreement, which is crucial for further financial assistance.
According to sources, the IMF also rejected Pakistan’s proposal to lower withholding tax by 2% and refused to grant tax relief on tobacco and beverages.
Additionally, no agreement was reached on easing Pakistan’s revenue targets for March 2025, making it more challenging for the government to meet its fiscal obligations under the IMF programme.
To finalize the staff-level agreement, Pakistan will be required to provide additional guarantees. The IMF has also imposed a condition preventing provincial governments from intervening in wheat procurement.
However, the global lender has expressed willingness to integrate climate finance into the programme. Through the Resilience and Sustainability Facility, Pakistan may receive financial support for climate-related projects.
With critical tax relief requests denied, Pakistan faces increased pressure to implement stricter fiscal measures and provide further assurances to unlock the next tranche of IMF funding.
