Pakistani government has decided to approach the International Monetary Fund IMF to seek approval for reducing the tax rate on the property sector.
High property taxes have caused a slowdown in real estate activities, leading to 15% decline in the growth of insurance sector.
This technician has contributed a lower tax revenues for the federal board of revenue FBR.
FBI recorded and revenue shortfall of PKR 101 billion in October 2024. Tax collections stood at PKR 879 billion, against the target of PKR 980 billion.
Lower revenues were primarily attributed to a decline in import volumes and reduced local sales tax collection.
Despite the shortfall, 2024 saw a 24% increase in revenue compared to October 2023, when collection totaled PKR 711 billion.
In the first four month of FY2025 revenue collected at PKR 3.42 trillion target is PKR 3.63 trillion and shortfall is PKR 190 billion 5.23%. Revenue increased by 25% compared to the same. In FY2024
Equipment sources highlighted at the tax burden on real estate has hindered overall business activity, negatively impacting growth in revenue generation.
They emphasize their need to address these challenges to revive economic momentum in the property in construction sectors.
The government is optimistic optimistic that engaging with the IMF to rationalize property taxes will revitalize the real estate sector, stimulate construction growth, and help FPR achieve its fixed revenue targets.
If successful, this move could lead to broader economic benefits by encourage encouraging investments and jobs creation in the construction and real estate industries.
