Pakistan on Thursday called on the International Monetary Fund (IMF) to allow it to reduce tax rates on par with regional countries to stop the rising outward money on money, as the global lender did not see any greater progress in exploiting real income for retailers and real estate dealers.

On the second last day of the negotiations, the IMF also briefed the foreign diplomats on the results of the first review. The IMF showed largely satisfaction with the implementation of the program except in property, real estate and privatization, according to the people who are interested in the meeting.

The global lender supported a steady increase in economic growth and said that any rapid change to higher growth rate may cause concerns about higher tax deficits.

During the interaction with the foreign diplomats, a diplomat asked about the extension of the federal cabinet in the middle of the IMF visit to Pakistan. According to sources, the IMF delegation said the size of the cabinet was still smaller than the previous cabinet.

Prime Minister Shehbaz Sharif has doubled the size of his cabinet to over 50, which also creates a new department – the unit for public affairs.

The IMF briefed the diplomats on the overall progress of implementing key forms, especially the introduction of agricultural income tax. It acknowledged that the progress of charging the tax from the agricultural sector would be gradual.

However, the sources said that the IMF declared at the meeting that there was no greater success in bringing the retailers to the web and that there was also a need to bring changes in the real estate sector. The IMF also emphasized the privatization agenda, they added.

The IMF briefing was not sincere, and mission manager Nathan Porter gave guided answers to the diplomats, the sources said.

Pakistan and the IMF broke their gaps on the tax target, which, in terms of the size of the economy, may remain at 10.6% of GDP, but in absolute terms, it would go down below RS12.5 trillion due to now estimated reduced size of the economy.

Meanwhile, the Pakistani authorities on Thursday called on the IMF to allow it to reduce tax rates to stop the capital flight from the country. The problem was erected by FBR, who said that due to attractive rates in the golf region, the money flies out, the sources said.

Due to high transaction fees, political and financial uncertainty, people take out their money and mostly parking in Dubai. FBR has identified 72 real estate agents who are instrumental in making investments in the Gulf, according to government sources.

Express Pakinomist has seen the list of these names that carry people from some influential families. However, the government has no means to prevent them from investing abroad. Some of them are tax files with FBR, the officials said.

The sources said FBR admitted before the IMF that the traders and the jewels were the two hard nuts to crack. FBR also confessed to the IMF that the Tajir Dost scheme due to major design errors had failed.

The government had to collect RS50 billion from the traders under the scheme, but it ended up collecting peanuts.

The IMF was informed that the big dealers also prevented the smaller ones from joining the scheme and as a result it could not extend the scheme to 43 cities. The FBR plan to bring at least 10 million retailers into the net flopped, the IMF was told.

Nevertheless, FBR IMF informed that it managed to show some progress. During the first eight months of this financial year, there was an increase of 30% in registrations of new taxpayers, and the number of returns increased from 509,173 to 774,494. There was an increase of more than half in return of return, and as a result, withholding withholding tax payments also raised 43% over the first eight months.

The company’s tax payments on the back of higher taxes and more filing increased from RS86 billion to RS291 billion.

The IMF was told that FBR had made changes in the tax return of the tax return to ease people showing their landowners. But FBR did not have access to Tehsil and Towns Level Land Holding Data. There was also a problem that the people have given their countries on lease, which will make it difficult to charge taxes on agricultural income.

The fund was told that there was some progress in expanding Sale (POS) network to stores-a quasi-real-time connection between the store and the FBR database. In June, 30,500 stores were integrated through POS – a number that has now grown to 37,200, the IMF was told.

A branded company can own dozens of stores, which means that the actual number of dealers associated with FBR may be around 10,000. FBR is planning to target 137 large chain stores to track sales, the sources said.

The real challenge will be to bring the wealthy jewels into the net who remain quiet out of the FBR web, the sources said.

The sources said the IMF will change the FBR’s goal of bringing new taxpayers into the net by specifying the actual number of new retailers, real estate dealers and wholesalers. This is done to avoid the generic statement that tens of thousands of new taxpayers have been brought to the net, the sources said.