The International Monetary Fund (IMF) has urged Pakistan to launch a crackdown on tax evasion in the real estate sector as part of ongoing negotiations to unlock a $1 billion loan tranche under its $7 billion loan program.
A nine-member IMF mission, led by Nathan Porter, arrived in Islamabad to evaluate Pakistan’s economic performance and assess its eligibility for the next loan installment.
During the discussions, the IMF demanded action against individuals and agents who misdeclare property values. In response, the Pakistani government assured the IMF that it would activate the Real Estate Regulatory Authority to enhance oversight and transparency in the sector.
As part of the proposed reforms:
- Individuals and agents providing false property valuations could face up to three years in prison.
- Fines between Rs200,000 and Rs500,000 may be imposed on agents who provide incorrect information.
- Property transfers involving misdeclaration could result in fines ranging from Rs500,000 to Rs1 million.
- Failure to register with the regulatory authority could lead to a Rs500,000 fine.
The IMF delegation will remain in Pakistan for around two weeks to finalize its assessment. Last month, the IMF reportedly objected to sales tax concessions on locally sold electric vehicle parts, recommending standard tax rates under the country’s new electric vehicle policy.
