WorldPosted at: May 15 2025 5:05PM

Islamabad, May 15 (UNI) As Pakistan edges closer to unveiling its federal budget for 2025–26, the International Monetary Fund (IMF) is now directly shaping the country’s economic policy. One of the global money lender’s latest demands includes a substantial increase in the Capital Gains Tax (CGT) on property transactions — potentially raising the rate from the current 15% to as high as 40%, bringing it in line with the corporate income tax.
The move, pushed by the IMF during virtual negotiations with the Ministry of Finance and the Federal Board of Revenue (FBR), is part of a broader push to overhaul Pakistan’s fragile tax system.
The virtual negotiations between the Ministry of Finance, the Federal Board of Revenue (FBR), and the IMF continue today. The IMF is pushing for broader tax reforms aimed at enhancing tax-to-GDP ratio, which is being targeted at 11% in the upcoming budget. Expenditures, meanwhile, are projected to be 20.3% of GDP, reports Samaa TV.
The IMF’s influence is far from subtle. Since Pakistan’s last bailout programme, the global money lender has played an increasingly direct role in key economic decisions—from energy pricing to subsidy reform. Now, tax policy is firmly in its sights.
Officials at the FBR argue that Pakistan’s real estate sector is making large untaxed profits and that current CGT rates are far too low. According to them, the proposed CGT raise would bring much-needed fairness to the system.
However, real estate groups warn that a sharp hike could slow down property transactions, hurting investment and growth in the sector.
To ease the impact, the government is considering tax breaks for first-time homebuyers, hoping to protect genuine buyers while still meeting IMF revenue targets.
The CGT debate showcases Islamabad’s delicate balancing act of trying to satisfy the IMF without facing domestic backlash. Final decisions on tax structure changes are expected to be a cornerstone of the upcoming budget, set to be unveiled in June.
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