The International Monetary Fund (IMF) has granted partial permission for a 2% decrease in withholding tax on property transactions, in response to a request by the Federal Board of Revenue. The adjustment, which will take effect in April 2025, is intended to enhance real estate company activity. However, the withholding tax on property sellers will not alter.
According to FBR officials, an agreement has been reached to lower the Federal Excise Duty on property acquisitions. The government persuaded the IMF to reduce the withholding tax rate for purchasers while still collecting the fee from sellers. FBR officials think that taking this step will help to reach a compromise on the draft Memorandum of Economic and Financial Policies, opening the path for a final agreement.Progress on this issue is expected within the next week.
The IMF has also authorized a PKR 1,250 billion loan from banks to help decrease circular debt in the electricity industry. Furthermore, the IMF and the government are now discussing financial objectives for the forthcoming fiscal year. Experts have applauded this move, claiming that the relief measures will benefit the real estate, property, and construction industries.
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