IMF asks Pakistan to tax Cryptocurrencies and real estate. Pakistan’s newly elected government is currently engaged in discussions with the International Monetary Fund (IMF) to secure additional funding aimed at tackling the country’s economic hurdles.
As talks progress, the IMF has proposed several measures to broaden the tax base and improve revenue collection.
IMF asks Pakistan to tax Cryptocurrencies and real estate
During negotiations, the IMF has urged the Federal Board of Revenue (FBR) to impose additional taxes on the retail and real estate sectors.
Also read: IMF wants to increase tax burden on non-salaried and salaried class
This move is intended to enhance revenue streams and address existing loopholes in the taxation system.
Inclusion of Cryptocurrencies in Tax Net
In a significant development, the IMF has recommended bringing cryptocurrencies under the tax net.
This proposal reflects the evolving nature of financial markets and aims to ensure that all forms of income are appropriately taxed.
Monitoring Property Transfers
To address challenges in taxing capital gains from real estate transactions, the IMF has suggested mandating property developers to monitor and report all transfers preceding property title transfers.
Penalties for non-compliance are also proposed to enforce adherence to these regulations.
Implications for the 2024-25 Budget
The recommendations put forth by the IMF are expected to influence the upcoming budget for the fiscal year 2024-25.
It is anticipated that the Federal Board of Revenue (FBR) of Pakistan will incorporate these suggestions into the budgetary framework to bolster revenue generation efforts.
Taxation of New Investment Avenues
In addition to traditional sectors, the IMF has underscored the importance of taxing new types of investments, such as cryptocurrencies.
This proactive approach reflects the IMF’s recognition of emerging financial trends and its commitment to ensuring a fair and comprehensive tax regime.
Broadening the Definition of Taxable Assets
To further strengthen the tax system, the IMF has recommended amending the definition of “personal movable property” in the Income Tax Ordinance.
This proposed amendment aims to encompass a wider range of assets that can be held as investments, excluding those used as stock in trade or subject to depreciation.
The IMF‘s recommendations signify a concerted effort to address Pakistan’s economic challenges through comprehensive tax reforms.
As negotiations continue, the government will need to carefully consider these proposals to chart a path towards sustainable economic growth and stability.
