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Govt-IMF agreement to be signed within two days for loan resumption: Miftah Ismail

The IMF officials believe that the revenue measures are insufficient to achieve tax collected target of Rs7.2 trillion.

ISLAMABAD: Finance Minister Miftah Ismail said the stalled International Monetary Fund’s (IMF) Extended Fund Facility (EFF) would be revived within a day or two.

“I am hopeful that the IMF programme will be revived,” the finance minister said while talking to journalists as rupee is losing more value daily amid uncertainty over the revival of the fund’s programme.

Ministry of Finance team was expected to conclude the staff-level agreement by Sunday (June 19) on the basis of revenue and expenditure measures in next year’s primary budget — the difference between revenues and expenditures, excluding interest payment — in Rs152 billion surplus.

The Fund still has reservations over Rs9.5 trillion expenditures projected by the authorities for 2022-22. The IMF officials believe that the revenue measures are insufficient to achieve tax collected target of Rs7.2 trillion.

The government took the toughest measures to end fuel subsidies and hiked the POL (petrol, oil, lubricants) prices up to unprecedented levels in order to convince the Fund to revive the programme. 

However, the IMF is still insisting on doing more knowingly that Islamabad has turned into a “desperate borrower” mainly owing to the depletion of foreign currency reserves.

The finance minister told journalists that the government aims at taxing the wealthy and providing relief to the poor through the budget for the fiscal year 2022-23.

“IMF has no relation with the increase in salaries. Also, the tax exemption to the people earning below 1.2 million [annually] will remain in place,” the finance minister said.

Taxes on property

Miftah Ismail further said that once construction begins on an empty plot, it will be exempted from taxes.

“Lay one brick on the empty land and the taxes will be lifted. But we will not impose a tax on anyone who has not acquired the possession of a plot or has not received the permission to start construction on it,” he said.

The finance minister said if a person has been granted permission to start construction on a piece of land and they still do not begin building something on it, then they will have to pay the tax.

In the coalition government’s first budget, the finance minister proposed a 15% capital gains tax on immovable property for a one-year holding period, which will be reduced by 2.5% for every additional year.

Moreover, he has also proposed advance tax on filers to be increased to 2% from the previous 1% on the purchase of property and non-filers 5%.

Javed Mahmood
Written By

I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.

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