IMF May Object to Relaxed Enforcement Measures in Revised Finance Bill 2025–26

Under Section 175AA, the Federal Board of Revenue (FBR) is empowered to exchange taxpayer and banking data for “high-risk persons.”

By DTD- On Jun 25, 2025

ISLAMABAD — The International Monetary Fund (IMF) is expected to raise objections to the revised Finance Bill 2025–26, as it introduces relaxed enforcement thresholds aimed at preventing so-called “ineligible persons” from purchasing real estate and vehicles, according to a report by The News.

For the first time in Pakistan’s legislative history, the National Assembly’s Standing Committee on Finance has proposed substantive changes to the Finance Bill during the parliamentary process. The updated bill, which now runs 348 pages, down from the originally tabled 355 pages, is scheduled to be presented before the National Assembly in two days.

Government officials fear the IMF may challenge the rollback of stringent fiscal enforcement mechanisms—especially those related to raising Rs389 billion in additional revenue. The Fund may require concrete assurances that Pakistan remains committed to achieving its Rs14.131 trillion tax revenue target for FY2025–26.

Key Threshold Revisions

Vehicle Purchases: A threshold of Rs7 million has been set. Any individual purchasing a locally manufactured or imported vehicle valued above this amount (including taxes and duties) must provide tax return documents. Buyers failing to do so will be classified as “ineligible persons.”
Real Estate Transactions: The registration or transfer of immovable property valued above Rs100 million (as per fair market value) will also trigger scrutiny.
Securities Investments: New investments exceeding Rs50 million in securities, mutual funds, or debt instruments within a fiscal year will be subject to verification, excluding reinvestments or rollovers.
Banking Transactions: An annual cash withdrawal threshold of Rs100 million across all personal bank accounts has been introduced.

Data Sharing and Tax Enforcement

Under Section 175AA, the Federal Board of Revenue (FBR) is empowered to exchange taxpayer and banking data for “high-risk persons.” Scheduled banks will be required to share customer data where discrepancies exist with the tax records. The information will remain confidential and will be used solely for tax-related purposes.

Action Against Counterfeit Goods

The revised bill authorizes Inland Revenue officials—of at least BPS-16 rank—to seize counterfeit goods and enforce monitoring provisions under Section 45A, further empowering the Revenue Department.

Digital Economy Taxation

In a major step toward taxing the digital economy, the Finance Bill introduces a Digital Presence Proceeds Tax:

Foreign vendors advertising on social media and digital platforms in Pakistan must deduct and remit tax on payments made for such advertisements.
These vendors and their payment intermediaries must deposit the deducted amount by the 7th of each month.
Quarterly statements must be filed by platforms outlining client-wise ad spending data.
A penalty of Rs1 million will be imposed for each failure to file the required statements.
Intermediaries may suspend remittances to foreign advertisers who evade the tax for over 120 days.
A 5% tax applies to payments made to foreign digital advertisers and providers of goods or services.

As Parliament prepares to pass the revised Finance Bill, observers note that Pakistan will need to carefully balance fiscal reforms with international lending obligations, especially as the IMF closely monitors changes that may impact revenue enforcement and tax collection capacity.