By Ali Imran
ISLAMABAD: The Pakistani government is considering a substantial increase in the capital gains tax (CGT) on real estate transactions for the 2025-26 fiscal budget, media reported citing sources.
According to sources, the proposed measure could raise the CGT rate on property sales by 20 percent, potentially escalating from the existing 15 percent to as much as 35 percent.
This adjustment aims to bring real estate taxation in line with corporate sector rates, addressing the sector’s untapped revenue potential.
The proposal emerged during the first day of virtual discussions between Pakistan and the International Monetary Fund (IMF), which included two sessions focused on fiscal planning.
Sources revealed that the government is targeting a tax-to-GDP ratio of 11 percent for the upcoming fiscal year, with real estate identified as a critical area for boosting tax collection. The sector currently generates lower revenue than its capacity, prompting the need for enhanced taxation measures.
The virtual talks with the IMF also addressed plans to introduce tax measures worth PKR 400 billion in the next budget.
However, the proposed CGT hike will not apply to income from stock market shares, sources clarified.
Prime Minister (PM) Shehbaz Sharif calling for measures to broaden the tax net, directed the authorities concerned to take strict action against individuals and sectors involved in tax evasion.
He also instructed the stringent accountability of officers and personnel assisting the tax evaders, according to a PM Office press release.
The prime minister lauded the efforts of the government’s economic team for swiftly heading toward achieving FBR’s revenue targets for the current fiscal year.
