Mini-Budget Under Consideration to Support Flood Rehabilitation

The government is considering a mini-budget that would impose new levies on imported items, cars, cigarettes, and electronic goods to raise funds for flood rehabilitation, according to a report by The Express Tribune.

The plan targets luxury goods and more than 1,100 imported products, with revenue to be collected through a federal levy. If approved by Prime Minister Shehbaz Sharif, the move could help bridge a widening revenue shortfall and finance recovery efforts, though provincial authorities are currently handling most relief operations.

Finance Minister Muhammad Aurangzeb chaired a meeting on Tuesday to review the proposals, which may be introduced through a Flood Levy Bill. While the exact rates and goods are still under discussion, the government is reportedly aiming to generate at least Rs. 50 billion.

Among the options under review is a Rs. 50 levy on every cigarette packet and a 5% levy on electronic goods above a certain price threshold. A levy on vehicles with an engine capacity of 1,800cc and above is also being considered. Officials noted that, unlike taxes shared with provinces, levies are retained entirely as federal revenue.

The plan follows a Rs. 40 billion revenue shortfall in July-August, which is projected to exceed Rs. 100 billion this month due to flood disruptions, raising concerns about meeting International Monetary Fund targets. The Finance Ministry is also considering applying a levy on imports equal to the regulatory duty reductions made in June under IMF-guided trade liberalisation.

The issue of the constitutionality of imposing such levies was discussed at length during Tuesday’s meeting. Meanwhile, Planning Minister Ahsan Iqbal chaired a separate meeting of the prime minister’s committee on flood damages, where provinces agreed a final damage assessment would only be possible once floodwaters recede.

He said a preliminary report would be ready within 10 days and assured that rehabilitation and relief operations are being carried out jointly by federal and provincial authorities.