The International Monetary Fund (IMF) has formally opposed the construction sector incentive package announced in the federal budget for the upcoming fiscal year 2026-27.
The government announced a Rs115 million package for the property sector in the new budget, aimed at stimulating construction activity and generating new employment opportunities.
Under the new budget proposals, the Federal Board of Revenue (FBR) planned to reduce the property sale tax rate for filers from 5.5 to 2.75 percent, according to sources within the revenue authority.
FBR stated that the primary objective of this tax reduction was to accelerate construction activity and attract greater investment into the real estate and property development sectors.
However, the IMF rejected the proposed tax cut, raising concerns about the fiscal implications of reduced revenue from the property sector during the ongoing economic stabilisation programme.
The objection from the IMF has effectively stalled the ambitions of of government using the construction sector as a driver of industrial expansion and employment generation in the country.
