IMF proposes taxing Pakistani pensioners for revenue boost

The International Monetary Fund (IMF) has put forward a request to the Pakistani government to introduce taxes on both civilian and military pensioners. This proposal also includes the elimination of income tax exemptions on various pension schemes. The IMF's delegation has arrived in Islamabad to kickstart discussions on two financial aid packages, with this taxation issue taking center stage.

If the government decides to implement this taxation on retirees and those already retired, it could potentially lead to a significant boost in annual income tax revenue. By scrapping all tax exemptions on different pension funds, Pakistan stands to gain an additional income of approximately Rs22 billion to Rs25 billion per year.

Pension funds in Pakistan have traditionally enjoyed tax exemptions, providing financial relief to retirees. However, the IMF's recommendation aims to enhance revenue generation for the government, especially in the current economic scenario where fiscal stability is crucial.

As discussions between the IMF delegation and Pakistani authorities progress, the decision regarding taxing pensioners will be closely monitored. This move could have significant implications for both pensioners and the government's financial health. It remains to be seen how Pakistan navigates this balancing act between revenue generation and social welfare.