The International Monetary Fund (IMF) has urged Pakistan to intensify its efforts against tax evasion in the real estate sector as part of ongoing negotiations to release a $1 billion loan tranche under the $7 billion loan program. In response, Pakistan has assured the IMF that it will activate the Real Estate Regulatory Authority (RERA) to enhance tax compliance within the sector.
Authorities plan to impose strict penalties on individuals and businesses involved in underreporting property values. Real estate agents who fail to register properties could face fines of up to Rs500,000, while those providing false information may be fined between Rs200,000 and Rs500,000.Â
RERA will also be authorized to impose prison sentences of up to three years for serious violations.
The negotiations for the loan tranche will continue until March 15, 2025, with discussions structured in two phases: technical talks in the first phase, followed by policy-level negotiations.Â
The IMF delegation is expected to meet with officials from the Ministry of Finance, the Federal Board of Revenue (FBR), the Power Division, and the State Bank of Pakistan.
Key areas of focus in the discussions include taxation on agricultural income, property transactions, and bringing retailers into the tax net. The IMF will also provide recommendations for the next fiscal year’s budget.
Additionally, separate consultations will be held with representatives from Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan to discuss provincial taxation measures and revenue collection strategies.
