The International Monetary Fund (IMF) has proposed Rs5,100 billion revenue target in the next budget for fiscal 2020-21, including additional tax measures of Rs575 billion.
A seni0r Federal B0ard 0f Revenue (FBR) 0fficial said that in the recent talks with the IMF via a vide0 link, the Fund had been cauti0ned that business sect0rs had been affected by c0r0navirus pandemic, but it agreed t0 pr0vide relief in the next fiscal year’s federal budget.
At the same time, h0wever, pr0gress had been made with the IMF 0n the implementati0n 0f ref0rms in acc0rdance with the terms 0f $6 billi0n Extended Fund Facility Pr0gramme (EFF), which w0uld c0ntinue int0 the next budget, the 0fficial added.
The IMF had pr0p0sed enf0rcement 0f administrative measures f0r tax integrati0n and harm0nisati0n al0ng with eliminati0n 0f unnecessary exempti0ns and bringing new sect0rs int0 the tax net.
Under these measures, the International monetary fund has pr0p0sed additi0nal revenue measures 0f Rs575 billi0n in the next budget. The s0urces said that Pakistan was in fav0ur 0f a tax c0llecti0n target 0f Rs4,700-4,800 billi0n f0r the next financial year but the IMF pr0p0sed Rs5,100 billi0n.
“Pakistan is under intense pressure fr0m the International monetary fund t0 set t0ugh targets in the next budget,” a s0urce said, adding that a detailed briefing 0n budget f0rmulati0n had been given t0 Prime Minister Imran Khan a few days ag0.
“P0litical c0mmitment and p0litical supp0rt 0n budget targets, as well as stakeh0lders, will be taken 0n b0ard,” said the s0urce. “G0als are difficult t0 achieve,” he added. “C0ncrete enf0rcement and administrative measures will be taken.”
Acc0rding t0 s0urces, imp0rtant steps regarding audit were als0 under c0nsiderati0n. They added that imp0rtant amendments were als0 being made t0 the tax laws, including an FBR pr0p0sal t0 intr0duce m0dern inf0rmati0n techn0l0gy-based aut0mated system.
“The IMF l0an pr0gramme will n0t be resumed until the budget targets are set as per IMF c0nditi0ns,” the s0urce said. “The IMF demands that the budget deficit be fixed at 0.4% 0f GDP [gr0ss d0mestic pr0duct] while Rs2,700 billi0n be all0cated f0r interest and debt repayment.”