ISLAMABAD – The government has planned to increase the Capital Gains Tax (CGT) on property sales by up to 25% in upcoming budget for fiscal year 2024-25.
Reports said CGT rate may be hiked from 15% to 40%. The capital gains tax could be aligned with the corporate sector’s income tax rate.
Millions of rupees in profit from property transactions are currently being taxed at a lower rate. There is a need to increase CGT on buying and selling in the real estate sector.
On the other hand, it is feared that increasing the gain tax might also cause a decline in property transactions.
Meanwhile, the Pakistani government is holding virtual discussions with the International Monetary Fund (IMF) regarding income and expenditures. In the budget, the tax-to-GDP ratio is expected to be 11%, while expenditure-to-GDP would be 20.3%.
The federal budget is likely to be presented on June 2 as the policy-level discussions between Pakistan and IMF are scheduled to conclude on May 23.
The total revenue for the next fiscal year could reach Rs20 trillion while strict control over expenditures will be essential to manage debt repayments.
The IMF has forecast that economic growth could remain at 3.6%, while inflation may be around 7.7% in the next fiscal year.
For the next year, the government has planned to set a revenue target as Rs19.09 trillion. Along with FBR collections, taxation on agricultural income will play a crucial role.
