Pakistan has committed to the International Monetary Fund (IMF) to sustainably raise additional revenue by targeting undertaxed sectors like agriculture and construction, broadening the tax base, and improve progressivity.
In the Letter of Intent (LOI) submitted to the IMF, the government has reiterated its commitment not to launch any new tax amnesties or grant further any new tax exemptions in 2023-24 including through the budget or Statutory Regulatory Orders without prior National Assembly approval.
According to the IMF report released on Tuesday, the IMF has projected Rs. 9,415 billion as the revenue collection target of the Federal Board of Revenue (FBR) for 2023-24. Out of this, direct taxes have been estimated at Rs 3,884 billion; sales tax at Rs. 3,607 billion; customs duty at Rs. 1,324 billion and the target of federal excise duty has been projected at Rs. 600 billion.
IMF said “Passed by the National Assembly on June 25, 2023 and signed into law by the president on June 26, 2023, our FY24 budget advances fiscal consolidation through a primary surplus of Rs. 401 billion (0.4 percent of GDP)—built on a set of credible measures that help:
Sustainably raise additional revenue by targeting undertaxed sectors (such as agriculture and construction), broaden the tax base, and improve progressivity;
Restrain non-priority spending (including through energy sector measures aimed at credibly containing energy sector subsidies, the public wage bill, and pensions) while making fiscal room to protect the generosity level of the Benazir Income Support Programme (BISP) Kafalat program. As in previous years, IMF is also working with the provinces to sign Memoranda of Understanding (MoUs) with the federal governments on their provincial fiscal targets consistent with the FY24 budget.
Source: Pro Pakistani