ISLAMABAD: The International Monetary Fund (IMF) urged for reduction of tax on pensions and payment period.
The International Monetary Fund (IMF) mission is likely to visit Pakistan in mid-May, during which the main features of the upcoming $6-8 billion bailout package will be finalized, the IMF team will stay in Islamabad for two weeks to finalize the economic indicators and financial framework for the next four-year program.
The government is then expected to present its next budget to Parliament on June 6-7, and it is likely to introduce more stringent fiscal consolidation measures, Pension reform may become a major demand of the IMF’s program and requires that pension continuity for several generations is not viable. Apart from this, a proposal is under consideration to bring pension into the tax net.
FBR is also bringing less than one Hundred thousand pensioners into the tax net, another plan is to levy a single tax rate of 10% on all pensioners.
The size of the new IMF program will be determined in future talks. Pakistan is likely to request that the program be expanded through environmental financing, as was done for Bangladesh and Egypt.
