In a significant development for Pakistan’s economic future, the International Monetary Fund (IMF) has rejected the proposal to impose new taxes on cash holdings and gold in the upcoming federal budget. At the same time, the IMF has greenlit tax relief measures aimed at supporting the salaried class, offering much-needed breathing space to millions of citizens amid rising inflation and economic uncertainty.
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No new taxes on gold or cash savings
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Relief approved for the salaried class
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Part of ongoing talks for Pakistan’s next IMF bailout deal
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Measures to be reflected in the Federal Budget 2025–26
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Focus on broadening the tax base rather than targeting middle-income groups
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New strategy expected to be announced by Finance Minister Muhammad Aurangzeb
Pakistan is currently negotiating a new bailout package with the IMF to stabilize its economy. With soaring inflation, dwindling forex reserves, and limited fiscal space, the government was expected to propose unpopular tax measures to meet IMF conditions.
One such proposal included levying taxes on idle cash and gold holdings — an idea that sparked controversy across the country. Critics argued that such a tax would:
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Penalize savers and the middle class
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Increase black-market trade in gold
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Be difficult to enforce due to undocumented wealth
In a welcome turn of events, the IMF has rejected this move in favor of more practical, progressive taxation policies.
Instead of taxing wealth indirectly, the IMF has asked the Federal Board of Revenue (FBR) and the government to:
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Expand the tax base by bringing the real estate, retail, and agriculture sectors into formal taxation
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Use technology and NADRA data to identify high-income non-filers
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Implement progressive taxation targeting luxury spending, not savings
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Strengthen documentation of financial transactions
Digital Invoicing, AI-powered audits, and real-time bank transaction tracking are part of the next-gen reforms being considered.
Finance Minister Muhammad Aurangzeb is expected to announce the federal budget in mid-June 2025, and it will likely include:
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Revised tax slabs for salaried individuals
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Incentives for tax filers and businesses
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Energy subsidies for low-income households
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Increased spending on education and health
Dr. Shahid Hassan Siddiqui (Economist):
“This is a sensible move. Tax the rich more effectively, not gold bangles in your mother’s locker.”
Meher Bukhari (Journalist):
“Gold and cash are traditional savings methods in South Asia. Taxing them would hurt women and small savers.”
Ali Khizar (Economic Analyst):
“IMF’s rejection of the gold tax shows a shift towards fiscal realism and better governance.”
The IMF’s decision to reject punitive wealth taxes while allowing relief for the salaried class marks a pivotal moment in Pakistan’s economic recovery roadmap. It sends a clear message: rather than short-term cash grabs, focus should be on broad reforms, digital transparency, and economic inclusion.
