The Pakistani government has decided to approach the International Monetary Fund (IMF) for approval of tax rate reduction on the property sector.
High property taxes have slowed down real estate activity, which has led to a 15 percent decline in insurance sector growth.
This technician has contributed less tax revenue for the Federal Board of Revenue FBR.
The FBI recorded a revenue shortfall of PKR 101 billion in October 2024. Tax collection stood at PKR 879 billion against the target of PKR 980 billion.
The lower revenue was mainly attributed to lower import volumes and lower local sales tax collection.
Despite the decline, revenues are expected to grow by 24% in 2024 compared to October 2023, when the total was PKR 711 billion.
The revenue target is PKR 3.63 trillion and the shortfall is PKR 190 billion 5.23% of PKR 3.42 trillion in the first four months of FY 2025. Compared to the same, the revenue increased by 25%. In FY 2024
Instrumental sources highlighting the tax burden on real estate have hampered overall business activity, adversely affecting growth in revenue generation.
They emphasize the need to address these challenges to restore economic momentum in real estate in the construction sector.
The government is hopeful that engaging with the IMF to rationalize property taxes will revive the real estate sector, stimulate construction growth, and help the FPR achieve its set revenue targets.
If successful, the initiative could lead to broader economic benefits by encouraging investment and job creation in the construction and real estate industries.
