IMF ‘satisfied’ with Pakistan’s tax growth, no mini-budget expected

ISLAMABAD: The International Monetary Fund (IMF) has expressed satisfaction with Pakistan’s efforts to increase its tax-to-GDP ratio by 1.5 percentage points.

This rise, from 8.8 per cent to 10.3 per cent, has eased concerns, and no new taxes or mini-budget will be introduced. The Federal Board of Revenue’s (FBR) revenue target for ongoing fiscal year remains at Rs12.97 trillion.

According to Dawn, officials are optimistic that stable exchange rates and reduced interest rates will boost economic activity by December which will help offset a Rs190 billion tax shortfall recorded from July to October. There will be no additional taxes on petroleum products and no increase in the petroleum levy.

Discussions with the IMF also covered the implementation of agricultural income taxes starting next fiscal year.

Meanwhile, the draft Tax Laws Amendment Ordinance 2024, which includes new family income tax returns and the abolition of non-filers, is under review. The authority is also eyeing changes to Tajir Dost Scheme to tax more traders.

At a Senate Standing Committee meeting, concerns were raised regarding slow implementation of Islamic banking. The State Bank of Pakistan said that efforts are underway but further discussions are still needed.

FBR Chairman Rashid Mehmood Langrial outlined plans to enhance FBR’s enforcement, particularly around anti-smuggling measures.

A key point of contention involved a 10 per cent levy on transport and business between Pakistan and Iran. The Senate agreed to refer the matter to the Standing Committee on Communications for further review.

Other discussions touched on issues like counterfeit currency dispensed from ATMs and the weak enforcement of penalties for businesses issuing fake point-of-sale (POS) receipts.

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