The Federal Board of Revenue has shared a comprehensive tax revenue plan with the International Monetary Fund (IMF).
Sources told ProPakistani that per the tax machinery’s plan, efforts to boost tax revenue include increasing the number of taxpayers and leveraging technology for tax collection. Plans are underway to bring approximately 3.1 million retailers into the tax net, further strengthening the federal government’s approach to achieve the tax target for the current fiscal year.
Sources said structural changes within the FBR are also in progress to optimize tax collection efficiency. The regulator aims to achieve a tax target of Rs. 9.415 trillion for the current fiscal year.
According to sources, the IMF’s tax collection condition for the period July-December 2023 has been fulfilled. FBR surpassed its tax target for the first half of the current financial year, collecting Rs. 4.468 trillion during July-December 2023.
Sources added the FBR has achieved its tax target for the first eight months of the year as well. Notably, the tax collector has refrained from issuing any tax amnesty scheme in the current fiscal year.
FBR hasn’t specified how much time it needs to introduce a scheme to add 3 million retailers to the tax net, but the scheme needed to make it happen could be approved by the new Finance Minister any day now. When the IMF last inquired about the timeline for such an initiative during a virtual meeting last week, tax officials said it would depend on the Finance Division.
On Thursday, the IMF asked the FBR to increase the incidence of tax on salaried/non-salaried class and impose an 18 percent sales tax on petroleum products, stationery items, medicines, and unprocessed food.
The IMF has also recommended repealing remaining exemptions for donations and non-profit organizations contained in the Second Schedule of the Income Tax Ordinance and making them eligible for tax credits.
Besides tax collection and related initiatives, more details on items including FBR restructuring are expected to be shared in the aftermath of upcoming meetings.
