IMF for federal tax on income of landlords

Business

ISLAMABAD (Eshfak Mughal):- During the ongoing talks with Pakistani authorities in extended time, the International Monetary Fund (IMF) team has demanded for imposing federal tax on agriculture income which is domain of provinces so far.

Sources said that Pakistani authorities headed by Advisor on Finance Shaukat Tareen are Washington to hold talks with IMF to revive the loan program worth of $6 billion signed on May 2019.

Talks between Pakistan and international lender are ongoing from 5th Oct and should be concluded on 15th Oct as per scheduled. Sources says both parties could not conclude talks due to too much differences on economic framework. They also say that IMF is demanding to impose around Rs500 additional taxes including withdraw tax exemptions, tax on agriculture, revise power tariff and gas tariff which could be unpopular decisions for Premier Imran regime.

Sources said that on the demand of the international lender, Pakistani economic team is considering to impose federal tax on income from agriculture sector which is domain of provincial governments according to laws.

The tax collection authority in Pakistan is also favor of this move and it has estimated that Rs120 billion could be collected from this front.

The agriculture sector contributes 17 percent in GDP but in terms of taxes it doesn’t contribute substantial amount.

The legal experts believe that federal it is possible in law to impose federal tax on agriculture income. There is loopholes in tax collections from tax agriculture income due to many reasons at provincial levels including influence of landlords at provincial governments in Pakistan.

The IMF team is also demanded to withdraw tax exemptions which are enjoying influencial lobbies including landlords, business tycoons.

Earlier, Jihad Azour, director of IMF Middle East and Central Asia Department, told journalists that the talks between the Fund and the Pakistan government on the sixth review of the $6 billion Extended Fund Facility (EFF) had progressed to a “very good step”.

“The IMF mission to Pakistan and the authorities are currently in the process of the discussion around the sixth review of the programme. And the discussions are progressing around the various pillars of the programme and the measures that the government of Pakistan is currently contemplating,” he told the news briefing.

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