The International Monetary Fund (IMF) has urged Pakistan to step up efforts against tax evasion in the real estate sector as part of negotiations for the release of a $1 billion loan tranche under the $7 billion loan program. In response, Pakistan has pledged to activate the Real Estate Regulatory Authority (RERA) to strengthen tax compliance.
Authorities plan to impose strict penalties, including fines of up to Rs500,000 for unregistered property transactions and Rs200,000 to Rs500,000 for providing false information. Additionally, RERA will have the authority to impose prison sentences of up to three years for serious violations.
The negotiations, set to continue until March 15, 2025, are divided into two phases: technical discussions followed by policy-level talks. The IMF delegation will engage with officials from the Ministry of Finance, the Federal Board of Revenue (FBR), the Power Division, and the State Bank of Pakistan.
Discussions will focus on taxation of agricultural income, property transactions, and integrating retailers into the tax net. The IMF will also provide recommendations for Pakistan’s next fiscal budget. Moreover, consultations with provincial representatives from Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan will address taxation measures and revenue collection strategies.
