ISLAMABAD – The International Monetary Fund (IMF) on Thursday askedPakistan to take additional taxation measures in the shape of income andsales taxes and regulatory duty (RD) to pull up the annual tax collectiontarget from Rs5.8 trillion to Rs6.3 trillion.
This new demand by the IMF comes during the ongoing virtual talks in thecontext of losses incurring on the account of non-collection of petroleumlevy of over Rs600 billion during the current fiscal year.
The government will have to take additional revenue measures on the FBRfront to bridge the gap that surfaced on account of non-collection ofpetroleum levy.
Another recommendation by the IMF is to increase the base price of theelectricity tariff to the tune of Rs1.40 per unit to curtail the surge incircular debt.
Pakistani authorities have made quarterly adjustments to the power tariff,but if the base price is not increased, it is feared that the pace ofaccumulation envisaged under the Circular Debt Management Plan (CDMP) won’tbe materialised.
“Talks are underway and both sides may evolve a consensus on a staff-levelagreement whereby the FBR’s target may be jacked up from Rs5.8 trillion toRs6-6.1 trillion for the current fiscal year in the wake of FBR’s increasedcollection at import stage,” an official told the media.
IMF has also made a suggestion to increase the rate of personal income taxby adjusting the higher income bracket earning Rs75 million on an annualbasis, the officials said. There are different proposals underconsideration to adjust the rate of personal income tax to fetch anadditional Rs100 billion to Rs150 billion.
Read Top Stories
There is another proposal to withdraw more GST exemptions within thecurrent fiscal year. The FBR has also prepared a list of a few dozen itemswhere the RD will be jacked up for getting additional revenues. Thewithdrawal of Additional Customs Duty recommended by the National TariffCommission might be delayed but the final decision was expected on the eveof the upcoming budget.
So far, the IMF is satisfied with the collection of the board, says FBRChairperson Dr Mohammad Ashfaque.
He was speaking to journalists after attending the Senate StandingCommittee on Finance at the Parliament House.
He said that the ongoing talks with the IMF have not concluded so far, butthat the Fund staff was satisfied with the collection of the board. He saidthat the FBR exceeded its target by Rs186 billion in the first quarter asthe revenue collection stood at Rs1,395 billion in the first three monthsof the current fiscal year.
