The International Monetary Fund (IMF) urged the Federal Board of Revenue (FBR) to collect Rs7.2 trillion in taxes in the upcoming budget, with personal income tax (PIT) and GST harmonisation being prioritised.

“Discussions are ongoing as the FBR pitched up its tax collection target in the range of Rs6.9 trillion, but the IMF insists on stretching the FBR’s tax collection target in the range of Rs7.2 trillion in the coming budget for 2022-23,” top official sources confirmed on May 26.

When contacted for comment, FBR Chairman Asim Ahmed stated that work in this area was still ongoing.

RELATED STORIES

Total tax collection would be expanded to Rs7.2 trillion in the upcoming budget, up from Rs5.9 to Rs6 trillion in the previous fiscal year, according to revised estimates. The government was also having difficulty meeting its non-tax revenue target for the current fiscal year because the State Bank of Pakistan (SBP) did not provide its estimated Rs200 billion quarterly profit to the Ministry of Finance following the passage of the new SBP Amendment Act 2022. This sum may be provided in the next fiscal year, but the SBP found it difficult to provide it before June 30, 2022.

Personal income tax (PIT) would be markedly restructured, with the taxable cap likely to be raised from the present level of 0.6 million to Rs1-1.2 million, and the amount of slabs lowered from 13 to six. The IMF also suggested significantly raising tax rates.

ADVERTISEMENT

Former Finance Minister Dr. Hafiz A Pasha stated that the maximum tax rate was imposed on an annual income ceiling of Rs 5 million, which was 300 per cent higher than Pakistan’s per capita income. He proposed that those earning Rs20 million or more per year be subject to the full tax rate.

He furthermore recommended that the duration and rate of capital gains on stock shares be assessed and modified in order to collect more taxes.

Via: Islamabad Post