The International Monetary Fund (IMF) has demanded that Pakistan set a tax collection target of Rs7.25 trillion for the coming fiscal year, which will necessitate the imposition of additional taxes worth around Rs300 billion, including the elimination of agriculture tax exemptions and an increase in the burden on the salaried class.
The objective is approximately Rs350 billion above than what tax authorities anticipate can be earned without imposing new taxes in fiscal year 2022-23. The Rs7.25 trillion tax collection objective is Rs1.15 trillion higher than the revised estimate of Rs6.1 trillion for this year.
Finance Minister Miftah Ismail paid a visit to the Federal Board of Revenue (FBR) headquarters on Tuesday to examine the current fiscal year’s revenue collection situation and the prospect of setting the target for the next fiscal year at roughly $1 billion.
According to FBR Chairman Asim Ahmad, collection in the current fiscal year may be about Rs6 trillion, nearly Rs100 billion less than the previous government’s aim negotiated with the IMF.
The IMF had requested more tax measures to close the gap, but this was not possible in the current political climate.
In case the collection fell further short of expectations due to import constriction, the FBR chairman communicated mitigation measures with the finance minister.
The FBR told the minister that the loss will be made up by different administrative procedures, such as securing collection in tax disputes.
The meeting followed discussions in the Ministry of Finance, during which officials reviewed possible revenue measures and the tax objective for the coming fiscal year.
The administration is also set to resume face-to-face talks with the IMF next week, pending its ability to remove fuel subsidies by the middle of this month.