Tax measures in IMF’s LoI already implemented: Ishaq Dar

Finance Minister Ishaq Dar reiterated that tax measures mentioned in the International Monetary Fund’s (IMF) Letter of Intent (LoI) were already implemented by June 30, 2023.

“I gave a recent explanatory statement in the National Assembly which was meant to dispel the impression that the government will impose new taxes on the agriculture and construction sectors under the IMF agreement,” said Dar in a tweet post on Saturday.

“This explanatory statement is being misinterpreted,” he said.

“I again make it clear that the tax measures mentioned in the LoI are the ones that have been implemented in the country till 30th June 2023. Apart from this, no new tax is being imposed.

“It is also clarified that no federal tax has been imposed or will be imposed on agricultural income,” he added.

It was reported earlier that the government has committed to the IMF to sustainably raise additional revenue by targeting undertaxed sectors such as agriculture and construction, broadening the tax base, and improving progressively.

In the Letter of Intent (LOI) submitted by the government to the IMF, the government also reiterated its commitment not to launch any new tax amnesties or grant further any new tax exemptions in 2023-24 including through the budget or statutory regulatory orders(SROs) without prior National Assembly approval.

On Friday, Dar told the lower house said that the government would not impose further taxes on agricultural and real estate sectors in the wake of a $3 billion loan as part of the nine-month Stand-by Arrangement (SBA) with the IMF.

Dar said this after many newspapers reported that new taxes would be introduced on the agriculture and construction sectors due to “strict conditions” put forward by the IMF.

“I am giving a categorical statement here that not even a single new tax will be imposed: neither on agriculture nor on construction sectors,” he said.

The finance minister made it clear that the government has already delivered on the IMF’s ‘prior actions’ and announced taxation measures of Rs215 billion in additional taxes and expenditure cuts of Rs85 billion in the winding-up budget speech.