The government is considering imposing a specific levy or increasing the tax burden on paid and non-salaried classes earning more than Rs20 million per year in the upcoming budget 2022–23.
Prime Minister Shehbaz Sharif presided over a high-level meeting to discuss the next budget’s essential components. The premier will have to decide whether to increase tax revenue and thus increase subsidies or cut the tax revenue objective.
The administration is considering increasing the tax burden on the rich and affluent instead of increasing the percentage of indirect taxes. Top government officials admitted, “Yes, we are considering hiking taxes on the rich.” One of the proposals is to impose a tax modelled after the super tax, which was originally imposed at a rate of 5% on income earners earning Rs50 million per year but was gradually reduced and then repealed.
For the approaching budget 2022-23, PM Shehbaz will have to choose either increasing subsidies and increasing the FBR’s tax collection target or reducing subsidies and lowering the FBR’s tax collection target.
The government will have to choose between these two options in order to comply with the IMF’s proposed fiscal framework.
After talks with the international lender ended inconclusively the day before, Pakistan’s government increased local fuel prices on Friday to meet a major condition imposed by the International Monetary Fund for resuming its bailout programme.
Miftah Ismail, Pakistan’s finance minister, said on Tuesday that if offered, Pakistan would buy oil and food at reduced costs from Russia, if Moscow did not impose sanctions on Islamabad. He added, though, that Russia had not made such an offer so far.
Mr Ismail told CNN’s Becky Anderson that Moscow had not responded to the previous government’s letter requesting cheaper oil from Russia.
The finance minister also stated that if the economy had let it, the current government would have called early elections, but that in the current situation, the government’s first priority is to stabilise the country’s finances.
