Property deals: Cut in WHT rates being negotiated with IMF, FBR tells NA panel

ISLAMABAD: The Federal Board of Revenue (FBR) on Monday disclosed before the National Assembly Standing Committee on Finance that the government is actively negotiating with the International Monetary Fund (IMF) for a reduction in the withholding tax rates on the sales and purchase of immovable properties in the budget (2026-27).

“There is a tough negotiation continued with the IMF for convincing them for reduction in tax rates under 236 C and 236K of Income Tax Ordinance 2001,” the FBR high-ups apprised the NA Standing Committee on Finance and Revenue at the parliament house.

READ ALSO: WHT collection from contracts tops the list

The FBR official also reminded that the valuation rates for properties in different cities had been reduced.

The NA Standing Committee on Finance and Revenues held its meeting under the Chairmanship of Syed Naveed Qamar in the chair on Monday, whereby the debate triggered on the reduction in tax rates on properties in the wake of the recent Gulf War and the possibility of overseas Pakistanis shifting their income and assets to invest in real estate in the country.

Independent economist Ali Salman from PRIME Institute informed the NA Panel that the monster of circular debt of the gas and electricity sector surged to Rs5.1 trillion, including Rs 3.3 trillion of the gas sector and Rs 1.8 trillion of the power sector. The country’s external debt has reached USD137.56 billion.

The committee was told that despite signs of gradual economic recovery, Pakistan was still moving on a path of “fragile stabilization”, with major risks continuing to threaten the economy ahead of the 2026-27 federal budget.

The meeting reviewed Pakistan’s macroeconomic situation, fiscal priorities, IMF programme performance and structural reform challenges. Committee members expressed concern over rising inflation, unemployment, poverty, growing debt and continued dependence on indirect taxation and petroleum levy instead of broadening the tax base.

Standing Committee on Finance and Revenue Chairman Syed Naveed Qamar observed that continued reliance on indirect taxation and petroleum levies instead of sustainable tax-base expansion remains a serious concern.

Qamar also expressed concern over the growing burden of circular debt, the slow pace of reforms in state-owned enterprises, and the rising socioeconomic pressures caused by inflation, unemployment, and poverty.

The Chairman further noted the delay in the circulation of the Budget Strategy Paper and observed that the Ministry of Finance was legally bound under the Public Finance Management Act, 2019, to circulate the document promptly to ensure meaningful parliamentary scrutiny ahead of the budget session.

The chairman of the committee stated that the Federal Board of Revenue has consistently failed to meet collection targets despite repeated taxation measures imposed on existing taxpayers. He emphasized the urgent need for broadening the tax base through sustainable and equitable reforms instead of increasing the burden on already documented sectors of the economy.

Copyright Business Recorder, 2026