Tax relief for Pakistan’s salaried class proposed in the upcoming federal budget will hinge on the approval of the International Monetary Fund (IMF), while a key legislative proposal requiring income source disclosures on property purchases exceeding Rs10 million has been postponed until the next fiscal year.
These developments came during a meeting of the National Assembly’s Standing Committee on Finance and Revenue on Tuesday, chaired by PPP’s Syed Naveed Qamar.
The committee also approved significant amendments to the “Tax Laws Amendment Bill,” aimed at discouraging the use of undocumented funds in the real estate sector.
IMF visit to determine tax relief scope
Chairman of the Federal Board of Revenue (FBR), Rashid Mahmood Langrial, told the committee that while the government is proposing reductions in tax rates for salaried individuals in the 2025-26 budget, the final decision will depend on the IMF.
“The IMF mission is scheduled to visit Pakistan in the second week of May to deliberate on the proposed budgetary measures,” Langrial said, adding that negotiations with the Fund are ongoing and any fiscal adjustments must be aligned with its recommendations.
Disclosure requirement for property purchases deferred
The committee was briefed on the government’s earlier proposal that individuals not declaring their assets in the last five years of tax returns would be barred from purchasing property valued above Rs10 million (Rs1 crore). However, the committee decided to defer the bill and consider it for inclusion in the next federal budget.
The delay, members noted, was aimed at allowing the FBR time to complete essential technical upgrades to its online infrastructure for better tracking of property transactions and verification of asset declarations.
First-time buyers to get exemption
In a major relief to prospective homeowners, the Standing Committee approved an exemption for first-time property buyers. The eligibility of such individuals will be assessed based on “sufficient resources,” which the FBR defined as possessing assets — such as cash, gold, stocks, or bonds — equivalent to 130 per cent of the property’s market value.
This exemption was introduced to protect lower and middle-income citizens from unintended consequences of the proposed restrictions. However, a proposal floated by real estate developers to raise the exemption threshold to Rs50 million was rejected by the committee.
The committee also approved an amendment replacing the word “Board” with “Federal Government” in section 114C(1)(b) of the Income Tax Ordinance. This change grants the federal cabinet — instead of the FBR — the authority to determine the monetary threshold for property transactions that would require documented income.
According to the approved language, the federal government will consider the interests of the general public, particularly first-time or primary residence buyers, while setting any future value limits.
Ministries not paying minimum wage
Separately, the committee expressed concern over reports that several government departments have failed to implement the minimum wage of Rs37,000, as mandated by the federal government. The committee called for strict enforcement and sought accountability from the relevant ministries.
FBR to present revised draft in next budget
Chairman FBR Rashid Langrial assured the committee that a revised draft of the property-related income disclosure law — incorporating technical changes and public feedback — will be presented as part of the budget proposals for the financial year 2025-26.
The sub-committee working on the bill, led by PML-N’s Bilal Azhar Kiani, was constituted earlier this year and held consultations with key stakeholders, including builders and real estate agents. It also reviewed aggregated data provided by the FBR on property transactions in 2023-24.
The proposed reforms, officials said, are aimed at curbing tax evasion and regulating the real estate sector while ensuring that genuine buyers — especially those entering the property market for the first time — are not penalised.
