The possible increase in revenue collection target of Rs. 7,470 billion of the Federal Board of Revenue (FBR) for the fiscal year 2022-23 (FY23) was discussed during the ongoing talks between the FBR and the International Monetary Fund (IMF).
The first round of technical-level talks between the FBR and the IMF concluded on Friday. Sources told ProPakistani that so far the tax collection target of the FBR has not been changed.
However, the revision of the FBR’s target would depend on the exact figure of the additional taxation measures to be taken through the promulgation of an Ordinance. The FBR has proposed measures above Rs. 200 billion. The measures to raise the tax-to-GDP ratio were also discussed in detail between the FBR and the IMF.
Sales tax on petroleum products
The FBR has proposed a 17 percent sales tax on petroleum products or an increase in the standard rate of sales tax from 17 to 18 percent as major revenue generation measures. The FBR can easily impose sales tax on petroleum products through a notification. The revision in the rate of the sales tax would only be possible through an Ordinance, sources said.
The FBR has proposed to increase the rates of withholding taxes, tax on banks’ foreign exchange income, capital value tax on vehicles, and Federal Excise Duty on cars, beverages, and cigarettes. Other proposals included additional regulatory duties or a 3 percent flood levy on imports.
When contacted, FBR officials said that the FBR will achieve the assigned tax collection target of Rs. 7,470 billion by the end of the current fiscal year.