The International Monetary Fund (IMF) in principle has agreed to reduce the deduction tax (WHT) on the purchases of property by 2 %, starting in April 2025, while leaving tax rates on real estate sellers unchanged.
The decision follows the request of the Federal Revenue Council (FBR) to alleviate the costs of transactions in the real estate sector.
The fund also agreed to a decrease in the Federal duty (FED) on buyers, reducing the touge of 10 % to 9 %. However, the Federal Reserve will remain on the sellers at the current levels. These concessions were part of a virtual meeting between the Pakistani authorities and his colleagues on Friday night, during which progress was made towards the completion of the Memp and Financial Policy Memorandum (MEFP). The employee level agreement is expected next week.
FBR originally suggested discounts under Articles 236C and 236 thousand of income tax decree for both sellers and buyers, but the International Monetary Fund agreed to reduce only buyers. The current HT rates range from buyers between 3 to 4 %, depending on the value of the property.
FBR provided data to support its argument that the costs of high transactions have declined from investment and the limited real estate activity. The International Monetary Fund has been informed that reducing the tax burden on buyers could help stimulate the sector, which witnessed a capital trip due to high taxes.
In a separate privilege, the International Monetary Fund agreed to a declining review of the goal of collecting FBR taxes in March 2025 by 60 billion rupees, which reduced it from 1220 billion rupees to 160 billion rupees. The amendment is less than working days due to Eid al -Fitr. The full goal of the year was also revised from 12,970 billion rupees to a new range between 123323434 billion rupees.
To compensate for the lack of March, the International Monetary Fund asked FBR to increase groups in April and May to stay on the correct path of the new annual goal.
Meanwhile, the International Monetary Fund has also agreed to the government’s plan to collect 1257 billion rupees through banks to help address the increasing circular debt in the energy sector.
