The Economic Coordination Committee (ECC) of the federal cabinet will meet today (4 November) to discuss and likely approve a 17 percent General Sales Tax (GST) on high octane blending component (HOBC) in order to fulfill its commitment to the International Monetary Fund (IMF).
The committee, which would meet under the chairmanship of Finance Minister Ishaq Dar, would deliberate on a two-point agenda and consider adopting the revenue generation measure to offset shortfalls in tax collection observed in October.
ECC will also discuss an agenda on High-Speed Diesel (HSD)/ Gas Oil Premiums under the purview of the Petroleum Division.
The government recently raised the petrol levy to Rs. 50 per liter.
Besides the above, the government may impose additional taxes on imports to offset an estimated Rs. 100 billion gap in customs duty collection. Tax authorities have shared suggestions with the government to overcome the disparity by levying taxes on duty-free imports and raising the additional customs duty to collect roughly Rs. 60 billion in taxes.
They also include lowering the regulatory duty to allow imports in order to compensate for revenue loss. So far, no decision has been made to impose a new additional customs duty in addition to increasing the rates of existing additional customs duty collected at the import stage.
The Federal Board of Revenue (FBR) currently faces the difficult task of collecting over Rs. 700 billion in revenue for November 2022 in order to make up for the Rs. 22 billion shortfalls in October. It is worth noting that the government has set a tax collection target of Rs. 7.470 trillion for the current fiscal year, based on IMF demand, which will necessitate a 22 percent hike in tax collection.