Pakistan has assured the IMF of additional tax measures worth Rs200 billion to meet the condition of maintaining a budget surplus. The government will have to increase the payment burden on taxpayers to generate additional revenue.
This condition will be fulfilled in January by raising the withholding tax rate on landline, mobile phones, and cash withdrawals from banks. Other measures include the imposition of sales tax on solar panels and an increase in federal excise duty on sweets and biscuits.
According to a report citing sources, the government is trying to convince the IMF to reduce the annual primary budget surplus target, which is equal to 1.6 percent of GDP or Rs2.1 trillion.
The report revealed that if the IMF does not agree to reduce the primary surplus target, the government will have to implement the proposed measures or cut expenditures.
The FBR is currently facing a shortfall of Rs198 billion. As of October 29, revenues stood at Rs36.5 trillion. To meet the four-month target, the FBR must collect an additional Rs460 billion within two days.
Tax authorities said that to achieve additional revenue of Rs225 billion, the government will have to either increase the sales tax rate to 19 percent or choose one of the three—raising withholding tax, sales tax, or federal excise duty—to stay on the IMF track.
