The government will impose a new surcharge on fossil fuels to generate additional revenue, but the timeframe for imposition of this surcharge has not been mentioned by the Federal Board of Revenue (FBR).
According to a report of the FBR, the additional 2.6% increase required to reach the 13.7 percent Tax-to-GDP ratio by 2028-29 is expected to come from new surcharges on fossil fuels, enhancing the tax base of provincial taxes, and increasing non-tax revenue receipts of the Federal Government.
The report said that the Executive Board of the International Monetary Fund (IMF) has completed the 2024 Article IV consultation with Pakistan and approved a 37-month Extended Arrangement under the Extended Fund Facility (EFF) amounting to SDR 5,320 million (approximately US$7 billion). The agreement was reached on May 23, 2024. This arrangement includes a rigorous Fiscal Framework with the IMF.
Under this framework, the Government of Pakistan (GoP) has committed to achieving a tax-to-GDP ratio of 13.7 percent by the fiscal year 2028-29, with 11.1 percent expected to come from intensified policy and enforcement measures by the FBR. Supported by the World Bank, the FBR is implementing a Revenue Mobilization Program as part of this reform initiative.
The policies under the EFF are designed to enhance revenue collection from a broader range of sources, including at the provincial level. Key measures agreed upon under the Medium-Term Fiscal Framework (MTFF) included eliminating preferential tax treatments; broadening the coverage of Personal and Corporate Income Tax (PIT and CIT) to include previously untaxed sectors and reducing tax slabs, thereby raising the maximum tax rate to 45 percent; simplifying PIT for salaried (SI) and non-salaried individuals (NSI); expanding the coverage and rates of the Federal Excise Duty (FED) and overhauling the income tax and withholding tax regulations for motor vehicle registrations, FBR report added.
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Levy, additional levy, more additional levy, furthermore additional levy, more furthermore additional levy, what will be the new name?
increasing non-tax revenue receipts of the Federal Government.
They are imposing taxes and then saying to increase non tax revenues ?