New Delhi, May 16: The tax burden on ordinary citizens in Pakistan is set to rise significantly. The International Monetary Fund (IMF) has established a petroleum levy target of PKR 1.73 trillion for the upcoming fiscal year. This figure exceeds the current budget target by PKR 259 billion.
Additionally, the IMF has imposed stricter conditions on the Federal Board of Revenue (FBR) to meet its revenue targets. The people of Pakistan are already grappling with high inflation, and this decision by the IMF is likely to exacerbate their difficulties.
According to a report by The Express Tribune, the fund’s staff-level report indicates that both central and provincial governments will attempt to generate an additional PKR 860 billion in revenue. The central government will take preliminary steps, which will include new tax measures and their effective implementation. Meanwhile, provincial governments will increase sales tax on services and collect agricultural income tax to raise their share of PKR 430 billion.
The size of the central budget is expected to exceed PKR 17.1 trillion, which is approximately 9% higher than the revised budget for the current fiscal year. The defense budget is projected to be PKR 2.665 trillion, an increase of PKR 101 billion from the current budget.
Pakistan has agreed to the IMF’s conditions for imposing an additional PKR 215 billion in taxes. Furthermore, PKR 215 billion will be raised through audits, production monitoring, and other enforcement measures.
The IMF has tightened conditions for the FBR to achieve a revenue target of PKR 15.27 trillion for the next fiscal year. Pakistan has failed to meet this target for two consecutive years, prompting the IMF to increase oversight and conditions.
In contrast to the current indicative target, the IMF has now implemented a quantitative performance criterion. If the FBR fails to meet the set target, it will need to seek a waiver from the IMF’s Executive Board. Pakistan has accepted this condition.
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