The International Monetary Fund (IMF) has rejected several of Pakistan’s new tax proposals, including a capital value tax on movable assets like cash and gold, and a 5% federal excise duty on day-old chicks. These suggestions were part of Islamabad’s broader efforts to boost revenues in the upcoming fiscal year.
Officials confirmed that while the IMF supported certain measures—such as taxing digital services to raise Rs10 billion and offering income tax relief for those earning below Rs500,000 per month—it declined to raise the exemption limit to Rs1.2 million or offer any relief to top income earners. The 35% top slab and 10% surcharge on high incomes will remain unchanged.
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The IMF reportedly dismissed the idea of a capital value tax, urging the government to prioritize income-based taxation over taxing assets. The plan to tax chicks was also turned down, with the IMF questioning its logic and the absence of a comprehensive food sector study.
Additional measures under review include increasing taxes on dividend income and interest income from 15% to 20%, removing tax exemptions for venture capital firms and cinemas, and introducing a 5% duty on processed foods like chips and biscuits—raising the total tax burden on such products to 29%.
The IMF has also recommended raising excise duty on fertilizer to 10% and applying a 5% levy on pesticides, despite resistance from Prime Minister Shehbaz Sharif.