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In a bid to address potential shortfalls in the annual tax target, the interim government has devised a contingency plan amounting to a mini-budget, aiming to generate over Rs 18 billion per month through strategic tax measures.
As reported by the media, the contingency plan includes several key measures. It proposes an additional tax of Rs 5 per kg on sugar, an increase in the GST rate on textile and leather products to 18 percent, and higher taxes on the import of machinery and raw materials. Additionally, considerations involve raising taxes on various fronts, including the import of machinery, raw materials, supplies, services, and contracts.
Read more : Pakistan Secures 700 Million Dollars Loan Installment From The IMF
Moreover, the government aims to elevate its tax and petroleum development levy target for the upcoming financial year to Rs 11,000 billion, a significant increase from the current target of Rs 1590 billion. The annual target for the Petroleum Development Levy is also set to rise from Rs 918 billion to Rs 1065 billion, resulting in an additional levy of Rs 49 billion this year and Rs 147 billion next year.
This comprehensive plan has been communicated to the International Monetary Fund (IMF) as part of the caretaker government’s efforts to secure a bailout package. Considering the IMF’s previous concerns about Pakistan’s fiscal deficit, the government is optimistic that the proposed tax hikes will contribute to narrowing the deficit and aligning with the IMF’s expectations.
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