IMF May Object to Relaxed Enforcement Measures in Amended Finance Bill

The International Monetary Fund (IMF) is likely to object to the government’s revised Finance Bill 2025 which eases key enforcement provisions aimed at boosting revenue. The revisions soften clauses meant to generate Rs. 389 billion in additional taxes, reported a national daily. The original bill was 355 pages long. The revised version has been reduced to 348 pages and will be tabled before the National Assembly within two days. Among the changes, individuals will only be declared “ineligible” to purchase locally manufactured or imported vehicles if the invoice value exceeds Rs. 7 million. Such buyers must now present their latest filed tax return for booking or registration. For property transactions, only those exceeding Rs. 100 million in fair market value will trigger restrictions. For investment in securities, only amounts above Rs. 50 million per financial year will fall under compliance scrutiny. Annual bank cash withdrawals exceeding Rs. 100 million will also be subject to enhanced monitoring. The bill allows the Federal Board of Revenue to share tax declaration data with banks to cross-match account information using algorithms. Provisions for enforcement have also been expanded. Officers not below the rank of Naib Tehsildar or BPS-16 Excise officials can now be authorized to seize counterfeit or unmonitored goods under specific tax sections. New digital tax rules require foreign vendors with a digital presence in Pakistan to deduct tax on payments for advertisements and deposit the amount with the government by the 7th of each month. Social media and digital platforms must submit quarterly, client-wise statements of ad transactions involving local and foreign vendors. Non-compliance will result in a penalty of Rs. 1 million per default. Meanwhile, a 5 percent tax will apply on payments made for foreign advertisements and foreign goods. The government is expected to justify these relaxations to the IMF as the current fiscal year nears conclusion.