Pakistan’s federal government is expected to unveil an ambitious tax target of Rs. 12,900 billion for the Federal Board of Revenue in the forthcoming fiscal year’s budget, scheduled for presentation on June 10th.
The sources familiar with the budget reveal that this target represents a significant leap in tax revenue collection, necessitated by the IMF’s requirements for financial assistance. The proposed measures to achieve this target are diverse and far-reaching, potentially affecting a wide range of businesses and consumers.
Key among the proposals are increased tax duties on imported goods, which could drive up the prices of these products and impact consumer spending.
Additionally, the government plans to eliminate sales tax exemptions on certain food items, a move likely to strain household budgets.
Other significant measures include the expansion of withholding tax applications and the removal of existing sales tax exemptions on unspecified products.
Furthermore, higher customs duty rates are on the table, which could particularly affect industries reliant on imported raw materials and components.
The elimination of sales tax exemptions on food items and other products is expected to generate substantial revenue, although it may also lead to increased
costs for consumers. Expanding the scope of withholding tax and raising customs duties could similarly contribute to the revenue target but might impact specific sectors and overall economic activity.
While the precise details and final form of these budget proposals remain under wraps, the focus on raising tax revenue underscores Pakistan’s commitment to meeting IMF conditions.
