Islamabad: The International Monetary Fund (IMF) has asked Pakistan to implement fresh taxes amounting to Rs1.3 trillion in the upcoming budget, as part of the country’s efforts to secure a new bailout package to bolster its economic reforms, according to sources cited by The Express Tribune.
If approved, this measure would escalate the annual target of the Federal Board of Revenue (FBR) to a substantial Rs12.3 trillion. The FBR has reported a notable increase in tax collection, amounting to Rs5.150 trillion from July 1, 2023, to mid-February, compared to Rs3.973 trillion during the same period in the preceding fiscal year—a surge of 30 percent in levy collection during the initial seven and a half months of 2023-24.
The additional Rs1.3 trillion in taxes equates to 1% of the projected size of the economy for the upcoming year.
The report mentioned that the IMF is advocating for Pakistan to recover half of the additional taxes from both salaried individuals and businesses.
In its Tax Diagnostic report shared with the government, the IMF has recommended reducing the number of income tax slabs for salaried individuals to four, a move that would substantially increase the tax burden on both salaried workers and businesses if implemented.
Discussions on the IMF’s proposal for additional taxes are expected to take place during the forthcoming mission-level talks regarding the next bailout package. The government intends to negotiate with the IMF, particularly concerning the impact on salaried workers.
