IMF seeks tax base expansion plan, targets real estate, agriculture

Islamabad: The International Monetary Fund (IMF) urged Pakistan to broaden its tax base and enhance revenue generation as part of the conditions outlined in the $3 billion stand-by arrangement, the sources privy to the development said on Monday.

Following the disbursement of the first tranche of $1.2 billion last week, the IMF identified the real estate and agricultural sectors as having significant potential and requested a plan from the government in this regard.

Compliance with the IMF's conditions is a top priority for Pakistan, as the remaining $1.8 billion would only be released after two reviews, indicating the likelihood of additional tranches.

The decision regarding the implementation of these measures would be made either by the caretaker government or the newly elected government after the upcoming general elections.

Prime Minister Shehbaz Sharif had already affirmed their intention to step down from office before August 14.

Last week, Shehbaz Sharif assured that Pakistan would not violate the IMF agreement, sending a significant signal given the previous government's failure to implement a deal with the top global lender, which damaged the country's reputation internationally.

The IMF's focus remains on increasing energy prices, interest rates, and tax collection. Managing Director Kristalina Georgieva emphasized the need for Pakistan to accelerate structural reforms following the approval of the agreement. She praised the coalition government for the 2023-24 budget, considering it a positive step towards fiscal stabilization.

Georgieva called for the strengthening of public finances through enhanced tax collection, which is crucial for creating the necessary fiscal space to support social and developmental expenditures.