To meet the IMF preconditions for the release of two IMF tranches totaling $1.17 billion, the federal government has begun making preparations to introduce a mini-budget worth more than Rs40 billion.
An amendment to the finance bill would be made through a presidential ordinance before the Executive Board meeting of the Washington-based lender, according to Federal Board of Revenue (FBR) sources who confirmed that the government was considering taxing the fertilizer, sugar, and textile industries.
After the government was forced to change its mind about imposing fixed taxes on merchants, which the sources claimed had led to losses totaling Rs40 billion, the FBR’s Inland Revenue division began formulating outlines and ideas for the mini-budget.
The sources continued, “The government wants to tax different industries to collect Rs30 billion for the Pakistan State Oil (PSO),” noting that the action was a component of government measures to prevent the PSO from going bankrupt.
To fulfill this increased financing, the Economic Coordination Committee of the Cabinet instructed the Petroleum Division to collaborate closely with the Oil and Gas Regulatory Authority.
They stated that a modification to the financial law will result in the imposition of additional taxes on four important sectors.
The sources stated that the tax had been delayed until October and that starting in November, a new method would be proposed to collect taxes from shops. “The repeal of the tax has resulted in a loss of Rs40 billion in revenue,” the sources added.