The IMF has urged Pakistan to implement additional taxes amounting to roughly Rs1.3 trillion in the upcoming budget, potentially elevating the Federal Board of Revenue’s annual target to Rs12.3 trillion. Half of this burden is proposed to be shouldered by salaried and business individuals, sparking concerns about increased taxation on the already strained middle-class. Negotiations between the government and IMF are anticipated during upcoming talks for the next bailout package, particularly regarding the IMF’s insistence on imposing further taxes on the salaried class. Meanwhile, internal discussions on the budget for the fiscal year 2024-25 have commenced, as the government grapples with a shortfall in tax collection and ongoing challenges in achieving revenue targets amid economic constraints.
The Finance Minister, Muhammad Aurangzeb, has emphasized the need to broaden the tax base and accelerate the digitization efforts of the FBR during discussions with foreign bank representatives, according to the finance ministry. This push for tax reforms comes amidst concerns over the efficacy of current revenue measures and the pressing need to meet fiscal targets. Additionally, there is a recognition of the importance of modernizing tax collection processes to enhance efficiency and transparency within the revenue system. These efforts signal a proactive stance by the government to address fiscal challenges and bolster revenue generation in the face of economic uncertainties.