ISLAMABAD: In a significant development, it has been reported that there will be no tax imposed on pensions in the upcoming budget for the fiscal year 2024-25.

Sources familiar with the matter disclosed that Finance Minister Muhammad Aurangzeb successfully convinced the International Monetary Fund (IMF) to exclude monthly pensions from taxation in the upcoming budget.

The decision followed virtual talks between Pakistani authorities and the IMF team, where the issue of taxation was a key point of discussion. The Federal Board of Revenue (FBR) had initially drafted tax proposals under IMF directives, which included suggestions for equal taxation on both the business and salaried classes.

However, due to the Finance Minister’s efforts, the proposal to tax monthly pensions has been overturned. Sources indicate that several proposals advocating for uniform taxation have been presented to the IMF, showcasing Pakistan’s commitment to fair tax policies.

Negotiations between Pakistani authorities and the IMF are set to continue, with both parties agreeing to further virtual discussions on tax proposals. Meanwhile, Pakistani authorities will brief the Prime Minister regarding the ongoing negotiations with the IMF.