Sources reveal that Pakistan guarantees the IMF its commitment to accelerate the privatization initiative.
Pakistan has committed to the International Monetary Fund (IMF) that they will integrate the real estate sector into their tax system, according to sources. This pledge comes as negotiations between Pakistan and the IMF for the final installment of $1.1 billion under the stand-by arrangement approach their conclusion.
In this proposed scheme, all housing societies will be registered, and a tax hike will be implemented for non-filers in property transactions. The IMF has advised the government to encourage bank transactions over cash for property purchases.
The upcoming budget for the new financial year will incorporate initiatives concerning the real estate sector, aiming to establish cooperation between federal and provincial governments for uniform taxation in the property market.
Accelerating the Privatization Initiative
Pakistan has committed to accelerating its privatization efforts, as reported by sources within the finance ministry, during ongoing discussions with the International Monetary Fund (IMF) for a second evaluation of the nation’s stand-by arrangement.
Finance Minister Muhammad Aurangzeb is spearheading these talks with the lender, seeking the final installment of $1.1 billion in a nine-month, $3 billion loan program. Amidst a severe economic crisis, Pakistan agreed in June to restructure underperforming state-owned enterprises as part of an IMF bailout deal.
The previous administration endorsed a privatization strategy for Pakistan International Airlines, a financially struggling national airline. However, certain experts argue that similar attempts in the past have not shown success. As of June last year, the company had a staggering Rs785 billion in liabilities and had accumulated losses amounting to Rs713 billion. The CEO predicted potential losses of Rs112 billion in 2023.
According to insiders from the Finance Division, they shared that the PIA privatization process is progressing in a “favorable manner” and they anticipate a swift conclusion. Among the 25 state-owned enterprises being considered for privatization, there are four financial institutions, four real estate entities, two industrial companies, 14 power-related organizations, and the State Life Insurance.
It was further mentioned that at least 10 national power plants, including Balloki, Haveli Bahadur, Guddu, and Nandi, were part of the program. Additionally, House Building Finance Corporation, First Women’s Bank, Pakistan Engineering Company, and Sindh Engineering Limited were also included in the list.
