IMF Urged FBR to Remove Special Tax for Construction Sector

IMF Urged FBR to Remove Special Tax for Construction Sector

Islamabad: The International Monetary Fund (IMF) has requested the Federal Board of Revenue (FBR) to eliminate the special tax for the construction sector. It has also asked to integrate the sector into the sector into regular income tax framework just like other sectors.
Read more: IMF Asks Pakistan to Impose Tax on Salaried Persons and Petroleum Products

According to the sources, these recommendations were discussed in a meeting between IMF and FBR officials regarding the second review of the Stand-by-Agreement (SBA). The IMF has also proposed the abolishment of FBR`s discretionary powers to implement tax incentives. It has also asked the FBR to keep the incentives limited to a specific period of time and it must follow the rule of cost-to-benefit analysis.

The IMF reviewed the adjustment of eligibility criteria for tax credits to charitable donations to certain entities. It also requested the expansion of the National Tax Council`s role to include the streamline of tax rates and implementing the Provincial Tax Laws.
Read more: FBR Issued Deadline to Submit Tax Proposals for Budget 2024-25

Furthermore, the IMF recommended developing the Tax Policy Unit in the Ministry of Finance, Revenue and Economic Affairs Division (EAD) and the protocols for data exchange between the FBR and other relevant departments.
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