Pakistan tells IMF it will either add more taxes or increase tax rates in next fiscal year

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ISLAMABAD: The Pakistani government has assured the International Monetary Fund (IMF) that it will either impose additional taxes worth Rs1,300-1,400 billion or increase the current tax rates, during the next fiscal year, to enhance revenue. Authorities assured the IMF that Pakistan will set its tax collection target at Rs6,000 billion in the next fiscal year, adding that the tax collection targets for the current fiscal year will not be met. Pakistan also told the international money lender that its current tax collection targets will not increase beyond Rs4,600 billion. On the cost of electricity, the government said its price will increase by Rs4.97 per unit during three months of the current fiscal year. IMF Mission Chief for Pakistan Ernesto Ramirez-Rigo said Pakistan will have to take concrete steps to enhance its revenue. He was assured that the government will increase revenue under the petroleum levy from Rs450 billion to Rs511 billion. Pakistan said that in the next fiscal year, this figure will increase to more than Rs600 billion. The government told the IMF delegation that the total outlay of the budget for the next financial year will be Rs7,700 billion, adding that Pakistan will pay Rs3,100 billion in repayment of loans and the interest on those loans. The IMF was told that Pakistan will allocate Rs627 billion for development programmes in its upcoming budget and that the country will increase its ratio of taxes to GDP by an additional 3%. The government will also waive tax exemptions on food items, education and medicines.

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