The Federal Board of Revenue (FBR) would need to collect Rs. 60 billion on the 29th and 30th of September to meet the assigned target and avoid additional taxation measures in October.
Sources told Propakistani that the contingency revenue measures of Rs. 260 billion have been agreed with the International Monetary Fund (IMF).
They include:
- Sales tax on petroleum products (at least Rs. 50 billion)
- Excise duty on sugary drinks (Rs. 60 billion);
- Federal Excise Duty (2 rupees per stick) on Tier I-Tier II cigarettes (Rs. 150 billion)
- Withdrawal of sales tax exemptions to exporters.
The measures would be enforced if the FBR fails to achieve the assigned revenue collection target for September 2022.
Till now, the FBR has collected Rs. 565 billion against the fixed target of Rs. 684 billion for September 2022.
The board had provisionally collected net revenue of Rs. 489 billion during August 2022 against the target of Rs. 483 billion, reflecting an increase of Rs. 6 billion.
During the first two months of the fiscal year 2022-23 (July and August), the FBR collected Rs. 948 billion against the assigned revenue collection target of Rs. 926 billion. So far, FBR has surpassed the assigned target by Rs. 22 billion in the current fiscal year.
The final decision on the implementation of the contingency measures would be taken by the start of next month, sources said.
The government has committed to the IMF to trigger contingency measures at the earliest signs of the fiscal program’s underperformance.
They include an immediate increase in GST on fuel, as a prelude to reaching the standard rate of 17 percent, further streamlining GST exemptions including on sugary drinks (Rs. 60 billion) and other unwarranted exemptions such as those benefiting exporters, and increasing Federal Excise Duty on Tier I and Tier II cigarettes by at least Rs. 2 per stick with immediate effect to raise at least another Rs. 120 billion in revenue.
It should be noted that fbr also have to pay those people back who already paid excess taxes. The same department who want people to honestly file returns, itself dishonestly make the process so difficult to get excess tax back in cash.