ISLAMABAD: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has said that the government of Pakistan has to obtain approval from International Monetary Fund (IMF) for every tax-related proposal including any exemption, reduction in tax rates or any changes in tax regime.
During a briefing to the Senate Standing Committee on Finance and Revenue, Langrial stated that the IMF has agreed to the FBR’s proposal to generate Rs389 billion through enforcement measures during next fiscal year.
Langrial stated that the IMF is closely monitoring the country’s tax collection performance, adding that weekly meetings would be held between FBR officials, and IMF to monitor results of enforcement measures.
The issue came to the light when a private stakeholder raised the issue of expiry of exemption available to real estate investment trust (REIT) one year back.
Chairman FBR has sought time from committee on Senators’ proposals, whereas, the finance minister also endorsed the proposals of the senators.
Secretary, Ministry of Commerce also briefed the Senate Standing Committee on Finance that the new policy proposes four tariff slabs (0, 5, 10, 15) designed to support local industries.
Finance Minister Muhammad Aurangzeb told the committee that under the new tariff structure, import duties on raw materials and intermediate goods will be reduced in the first year.
This is part of a broader industrial support package, adding he said that lower input costs will help reduce the overall cost of production.
Previous governments had imposed high import duties in an attempt to curb imports, but the strategy yielded limited results in terms of long-term economic benefit, he added.
Chairman FBR Langrial added that past increases in tariffs were often used to protect inactive or inefficient industrial units, which ultimately distorted market competition and discouraged innovation.
The chairman of the Senate Finance Committee emphasised the urgency of bringing down production costs, particularly in comparison to regional competitors such as India and Bangladesh, where exporters enjoy significantly lower electricity tariffs.
“Pakistani exporters are burdened with high energy costs, which puts them at a disadvantage in global markets,” he remarked.
Finance Minister Aurangzeb assured the committee that the government is committed to reducing the cost of doing business. Electricity rates for industries have already been lowered and interest rate is expected to drop below 10 per cent in the upcoming fiscal year.
The government is also working on resolving industrial tax issues.
He said that Prime Minister Shehbaz Sharif has established a dedicated committee on tariff reform, which will continue to work on long-term structural changes to make Pakistan’s tariff regime more competitive and growth-oriented.
Copyright Business Recorder, 2025
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