The International Monetary Fund (IMF) wants Pakistan to tax Rs. 1.3 trillion more next fiscal year, massively raising the Federal Board of Revenue’s (FBR) annual revenue target to Rs. 12.3 trillion.
IMF wants the authorities to collect half of these additional taxes from the salaried class and businesses, reported Express Tribune.
The lender has shared its final Tax Diagnostic report with the government where it has advised reducing the number of income tax slabs for salaried individuals. In reality, such a move would drastically increase the tax burden on the salaried class and businesses.
The IMF and Pakistan will hold talks on the new Rs. 1.3 trillion in taxes in upcoming talks for a bigger loan program. The taxes haven’t been confirmed yet and the government aims to discuss this with the lender.
The current fiscal year’s tax collection target of Rs. 9.415 trillion has been deemed unattainable and now in order to raise the FBR’s tax-to-GDP ratio to 10 percent in FY25, the target would need to reach around Rs. 12.3 trillion.
The government is working on different taxation measures in the upcoming fiscal year, including more taxes on retailers, eliminating sales tax exemptions, and withdrawing reduced sales tax rates for FBR’s Tier-I retailers.