The federal government has approved new tax measures worth Rs. 36 billion to offset the financial shortfall caused by higher-than-expected salary increases and tax concessions on solar panels. These measures, which may also lead to an increase in chicken meat prices, are part of the agreement made with the International Monetary Fund (IMF)
This decision was made following approval by the National Assembly’s Standing Committee on Finance. The background is that the government increased salaries of public employees by 10% instead of the proposed 6% and reduced the proposed 18% tax on the import of solar panels to 10%.
The Chairman of the Federal Board of Revenue (FBR) stated that these concessions resulted in a reduction in the revenue targets agreed upon with the IMF.
According to him, the IMF demanded an alternative plan, under which six proposals were presented, out of which three were approved.
The three new tax measures approved to cover the deficit include: a federal excise duty of Rs. 10 per chick, which has drawn strong concern from the poultry sector. The poultry industry claims this measure will double the price of chicken, negatively impacting the business.
A 29% tax on profits earned by corporate entities through mutual funds, and a 20% tax on payments on government securities.
According to the FBR, the IMF has deemed these three proposals as suitable alternatives to maintain fiscal discipline under the current financial program.
However, the FBR has warned that if these measures are not implemented, the government may have to reinstate the 18% tax on the import of solar panels, which could harm the country’s progress toward renewable energy.
![Local residents at the Swat River, which is overflowing due to pre-monsoon heavy rains in the area on the outskirts of Mingora, the main town of Pakistan's Swat Valley [Sherin Zada/AP]](https://mmnews.tv/wp-content/uploads/2025/06/Flooding-in-Swat-river-120x86.jpg)
