The IMF review mission is expected to arrive by the end of February to conduct the first semi-annual review of the ongoing programme.

While the programme remains largely on track, several key challenges persist, particularly in taxation, fiscal policy, and broader economic reforms.

This review will be critical in determining Pakistan’s ability to navigate economic pressures while maintaining IMF-mandated fiscal discipline.

One of the most pressing concerns remains the government’s inability to broaden the tax base, a key requirement of the IMF.

Currently, the tax burden disproportionately falls on the same formal sectors, undermining equity and inclusivity in the tax system. Despite commitments to expand taxation to agriculture, retail, and real estate, progress has been limited.

Agriculture continues to enjoy substantial exemptions, while retailers and real estate investors largely remain outside the tax net.

To address this issue, legislative reforms must introduce progressive taxation measures targeting untapped sectors. This could involve revising agricultural income tax laws, enforcing stricter compliance among retailers, and rationalizing property transaction taxes to boost revenue collection.

However, in response to sluggish market activity, the government is considering lowering tax rates on real estate transactions. The move is aimed at reviving the sector, which has seen abysmally low trade volumes nationwide, dragging down the construction........

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