ISLAMABAD: The Federal Board of Revenue (FBR) on Monday informed the National Assembly Standing Committee on Finance that it was negotiating with the IMF for reduction in the tax rates on the sale and purchase of properties in the upcoming budget.
“There is a tough negotiation (fighting) continued with the IMF for convincing them for reduction in tax rates under 236C and 236K of Income Tax,” the FBR high-ups apprised the NA Standing Committee on Finance and Revenues and added in the same breath that the formation of the budget was shifted to the Tax Policy Unit under the jurisdiction of the Ministry of Finance.
The FBR official also reminded that the valuation rates for properties in different cities had been reduced. The NA Standing Committee on Finance and Revenue held its meeting under the chairmanship of Syed Naveed Qamar on Monday, whereby the debate triggered on the reduction in tax rates on properties in the wake of the recent Gulf War and the possibility of overseas Pakistanis shifting their income and assets to invest in real estate in the country.
Independent economist Ali Salman from PRIME Institute informed the NA panel that the monster of circular debt of the gas and electricity sector surged to Rs5.1 trillion, including Rs3.3 trillion of the gas sector and Rs1.8 trillion of the power sector. The country’s external debt has reached $137.56 billion.
The committee was told that despite signs of gradual economic recovery, Pakistan was still moving on a path of “fragile stabilisation”, with major risks continuing to threaten the economy ahead of the 2026-27 federal budget.
The meeting reviewed Pakistan’s macroeconomic situation, fiscal priorities, IMF programme performance and structural reform challenges. The committee members expressed concern over rising inflation, unemployment, poverty, growing debt and continued dependence on indirect taxation and petroleum levy instead of broadening the tax base.
Chairman Standing Committee on Finance and Revenue, Syed Naveed Qamar, observed that continued reliance on indirect taxation and petroleum levies instead of sustainable tax-base expansion remains a serious concern.
Syed Naveed Qamar also expressed concern over the growing burden of circular debt, the slow pace of reforms in state-owned enterprises, and the rising socioeconomic pressures caused by inflation, unemployment, and poverty.
The chairman further noted the delay in the circulation of the Budget Strategy Paper and observed that the Ministry of Finance was legally bound under the Public Finance Management Act, 2019, to circulate the document promptly to ensure meaningful parliamentary scrutiny ahead of the budget session.
The chairman stated that the Federal Board of Revenue has consistently failed to meet collection targets despite repeated taxation measures imposed on existing taxpayers. He emphasised the urgent need for broadening the tax base through sustainable and equitable reforms instead of increasing the burden on already documented sectors of the economy.
The members of the committee observed that provincial fiscal surpluses are disproportionately supporting federal IMF compliance targets. They further noted that development expenditure continues to remain compressed in favour of current expenditure and debt servicing, while Pakistan’s export sector continues to underperform compared to regional economies.
The committee further stressed that the Budget FY2026–27 must move beyond short-term stabilisation measures and instead serve as a platform for sustainable economic reform, fiscal transparency, improved governance, and inclusive growth.
