The International Monetary Fund (IMF) has instructed the Federal Government of Pakistan to raise taxes on the sale of property for both filers and non-filers in the budget that will be unveiled on Wednesday (today), with the goal of making it more expensive for non-filers to conduct business.
The government has concluded its discussions with the IMF over the tax reform policies that would be unveiled in today’s budget statement.According to sources, non-filers will eventually pay more in taxes because the present rate of 3 to 4 percent withholding tax on various investments will be doubled on property transactions.
It has been suggested that the withholding tax on property purchases made by non-filers be raised to 20–25 percent.
Investments would fall into three categories: investments up to Rs. 50 million, investments between Rs. 50 million and Rs. 100 million, and investments over Rs. 100 million.According to further sources, the government expects to receive up to Rs. 70 billion from the real estate industry in the next fiscal year.Previously, the IMF had ordered Pakistan to apply progressive fees for filers and non-filers, up to a 35 percent rate; however, the government is said to have changed how it operates.
