An increase in the FBR’s tax collection target is possible. (Represent)
Islamic:
The International Monetary Fund (IMF) has concluded the first round of “difficult negotiations” with Pakistan and said the Fund will share nine tables – including a financial and macroeconomic framework – with the Pakistani authorities to open up way for holding policy-level negotiations. next week, Geo News reports.
If Pakistan and the IMF reach an agreement by February 9, they will sign a staff-level agreement.
The authorities have massively revised the macroeconomic framework and shared it with the IMF, whereby real GDP growth is forecast to fall from 5% to 1.5% and 2% while inflation will average escalation from 12.5% to 29%. in the current financial year, Geo News reported.
The visiting IMF team indicated that nominal growth (real GDP growth plus CPI-based inflation) is predicted to exceed the 30% mark so the Federal Revenue Commission’s tax-to-GDP ratio Pakistan (FBR) is bound to fall even if it hits its projected annual tax collection target of Rs 7,470 billion, Geo News reported.
An increase in the FBR’s tax collection target is possible but its exact additional levy will be determined after receiving the nine pounds presented by the IMF mission which will be shared with the Pakistani authorities on Monday under the draft. Financial memo. and Economic Policy (MEFP).
“The IMF prescription suggests the toughest options on the tax and non-tax fronts to fill the widening fiscal gap. Various proposals under consideration include increasing the gasoline tax by 20 percent. Rs -30 per liter by maxing out the limit from the current Rs 50 per liter to Rs 70-80 per liter or reduce GST by 17% on POL products or increase GST rate by 1% from 17 to 18 % through presidential decree,” sources confirmed when speaking to The News International.
On the other hand, the IMF has requested that additional taxation on a qualitative, substantial and sustainable basis should be implemented irreversibly.
The FBR has prepared proposals to increase the Federal Excise Tax (FED) on cigarettes from Rs 6,500 per 1,000 cigarettes. It turns out that the government will raise the Fed rate by Rs 0.5 per bar, so the package rate will increase by Rs 10, Geo News reported.
There is another proposal to raise the Fed’s interest rate on sugary drinks to 17% from the current 13% through a small budget.
However, the FBR has faced enormous pressure from the diplomatic corps on this issue. Another aspect is that sugar is being used in these drinks, so sweetener owners who have political affiliations regardless of political divisions will also work to the end to block the proposal. this at any stage, Geo News reported.
Measures such as a 1% to 3% flood tax, which gives banks the high returns earned through taxes, and an increase in deduction rates are also in place.
Meanwhile, the FBR has announced the 2023 Public Officials Declaration Sharing Rule, under which information about the assets of public servants from BS-17 to BS-22 levels will be shared between the FBR and other entities. banks, Geo News reported.
In accordance with Statutory Regulatory Order (SRO) 80(I)/2023 issued by the FBR, the board will share a simplified or abridged version of the statement, based on areas agreed with the Bank. State of Pakistan, made by a civil servant in his electronic declaration filed with the FBR, local media reports.
The ongoing negotiations between the two sides, which began on January 31, were called “difficult” by Prime Minister Shehbaz Sharif.
Shehbaz Sharif, while speaking at a meeting in Peshawar on Friday, said that the IMF is causing “tough times” for Finance Minister Ishaq Dar and his team, hinting that harsh measures will be taken. now to revive the stalled lending program.
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
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