The International Monetary Fund has narrowed its focus in the new budget for mainly tax measures and rebalansing of the National Finance Commission Award, as the government is poorly struggling to find any room to relieve that grade and the property sector.

That grade has been hit the hardest, which according to the fresh details paid a high record high RS437 billion in income taxes of only 10 months of this financial year. The amount is higher with RS150 billion compared to last year.

On Thursday, the IMF called on the Pakistani authorities to listen to its experts instead of relying on the arguments of land re -reigns or the Laffer Curve theory, the sources say. The Pakistani authorities mentioned low revenue due to high tax rates that the IMF did not appreciate, they added.

During a separate session, the IMF also raised questions about the work on the federal revenue of revenue to reduce taxes for that grade, the government sources said. They added that the IMF was of the opinion that the proposed reduction in the rates of that grade can result in much higher relief than the government being claimed. FBR was now in the process of doing the paid class taxation plates.

The sources said that during the kick-off meeting with Finance Minister Muhammad Aurangzeb on Thursday for the budget approval, the IMF’s outgoing mission manager Nathan Porter narrowed his mission’s focus to four areas.

The IMF’s top priority would be the income measures to support RS14,307 trillion tax targets and repay the distribution of fiscal resources under the NFC without affecting the constitutional scheme. The sources said that the other two areas of interest during the negotiations will be any savings from the government’s reduction and privatization agenda in the next financial year. ]

The provinces receive 57.5% shares in federal taxes, and the government tried to hold back some of the sums without changing the constitution. During a meeting last week, a cabinet minister had recommended to get 50% of the extra defense spending from the provinces due to increasing demands following India’s naked hostilities against Pakistan.

The IMF team began almost discussions about the new budget from Turkey on Wednesday. The team plans to travel to Islamabad next week for the last round of negotiations ending on May 23.

The sources said the Pakistani authorities during the kick-off meeting raised the issue of higher tax rates that led to low collection in certain areas. However, the IMF outdated mission manager advised to listen to his experts. The IMF team did not seem impressed with Laffer Curve Economic Theory.

During a tax -related meeting with FBR, the authorities shared the proposal to reduce taxes for that grade. The sources said the government proposed to increase the exemption limit for income tax from RS600,000 to RS1.2 million a year.

It also suggested setting new record speeds of 10%, 25%, 33%and 35%, while adjusting the income levels upwards, where these plates will be efficient. The IMF’s view, however, was that this would significantly submit to revenue.

According to the fresh details, the employees paid a biking registration RS437 billion during July-April in this financial year, which was RS150 billion more than the last financial year. With two months back, the extra contribution would rise to around RS190 billion compared to RS75 billion, as the government had claimed last June.

The merit guarantees that the grade burden should be lowered by at least RS100 billion, as something lower would not end the discrimination with the class.

The sources said the government did not have enough tax space to give meaningful relief to the real estate sector. The original proposal is to reduce the withholding tax on the sale and purchase of the properties by only 0.5% each. FBR wanted that after lowering the tax, these should be treated as the final responsibility, but the finance minister asked to keep these adjustable.

There was also a proposal to introduce a new plate of capital gains for the higher earnings from the property, the sources said.

This week, the discussions also took place within the government to reduce VAT on packaged milk. Some members of the FBR suggested to reduce the rate from 18% to either 15% or 17%. However, some decision was made with a senior official who suggested keeping the rate unchanged.

The 18% VAT on packaged milk is the highest in the world despite higher malnutrition in Pakistan. While making a decision to reduce the tax on milk, FBR officials did not have a clear idea of ​​the price of the packed milk on the market.

The tax authorities had also proposed to beat the federal excise duty on biscuits, but there was no agreement on it within the government. The proposal to beat a new tax on biscuits and discussion at the level of the finance minister shows the government’s insensitivity.

The sources said the government also considered two options with regard to the withdrawal of tax -free status of the previously federally administered tribal areas. One proposal was to introduce the standard of 18%, while the second proposal was to introduce a 10% rate, the sources said. However, the final decision will be made by the leading leadership of PML-N, the sources said.