Federal Board of Revenue (FBR) Chairman, Asim Ahmad presented the initial sketch of budget proposals to the tune of Rs. 300 billion before the Finance Minister Miftah Ismail for consideration in the next fiscal budget.
Sources told Propakistani that the preparatory meeting for the IMF talks was held at the Ministry of Finance on Monday. Tax authorities attended the meeting and presented data on revenue collection for 2021-22, revenue trends, tax projections for the next fiscal year, and an initial sketch of budget proposals for 2022-23.
The budget proposals broadly covered areas of withdrawal of exemptions, changes in the personal income tax slabs, imposition of new taxes, enhancement in tax rates, tax relief measures, tariff rationalization, and estimated revenue through enforcement and administrative measures to be taken in 2022-23.
The structural benchmarks agreed with the IMF were also discussed in detail during the IMF preparatory meeting at the Finance Ministry.
Minister of State for Finance, Dr Aisha Ghaus Pasha, Acting Governor State Bank of Pakistan (SBP) and FBR Chairman would leave for Doha on Tuesday (May 17) and Finance Minister Miftah Ismail will reach Qatar next day i.e. Wednesday (May 18).
Sources said that the revenue measures of over Rs. 300 billion may be required in the coming budget (2022-23) to meet the next fiscal year’s estimated revenue collection target of Rs. 7.2 trillion. The FBR will reach a figure of around Rs. 6 trillion by the end of the current fiscal year.
The FBR has estimated to collect Rs. 6.8 trillion to Rs. 6.9 trillion keeping in view the macroeconomic indicators and projected autonomous growth in revenue during 2022-23. Therefore, the revenue measures of Rs. 300 billion may be required to meet the next fiscal year’s estimated tax projections of Rs. 7.2 trillion.
It is important to mention that Pakistan had agreed on the following structural benchmarks with the IMF:
- Preparation of draft personal income tax (PIT) legislation ;
- preparation of a plan by the Ministry of Finance and State Bank of Pakistan, in consultation with other stakeholders, to establish an appropriate Development Finance Institution to support the eventual phasing out of SBP refinance facilities;
- completion of the first stage recapitalization of the two private sector banks that are undercapitalized;
- cabinet decision on the second step of the energy subsidy reform for residential consumers;
- parliamentary approval of new SOE law in line with staff recommendations;
- issuance of regulations by the Public Procurement Regulatory Authority to require collection for publication of beneficial ownership information from companies that are awarded public procurement contracts for Rs. 50 million and above.