Pakistan has reaffirmed its commitment to the International Monetary Fund (IMF) to sustainably raise additional revenue through various tax reforms. In the Letter of Intent (LOI) submitted to the IMF, the government pledged to target undertaxed sectors like agriculture and construction, broaden the tax base, and enhance progressivity. Furthermore, the government assured not to introduce any new tax amnesties or grant further tax exemptions in the fiscal year 2023-24 without prior approval from the National Assembly.
Targeting Undertaxed Sectors and Broadening the Tax Base:
Recognizing the importance of strengthening the country’s fiscal position, Pakistan has made a commitment to the IMF to focus on tax reforms. By targeting undertaxed sectors like agriculture and construction, the government aims to improve revenue generation from these areas. Additionally, the plan to broaden the tax base will ensure that a broader segment of the population contributes to the country’s revenue collection. These measures are essential for creating a sustainable revenue stream and achieving fiscal consolidation.
IMF’s Revenue Collection Projections for 2023-24:
According to the latest IMF report, the projected revenue collection target of the Federal Board of Revenue (FBR) for the fiscal year 2023-24 stands at Rs. 9,415 billion. The breakdown of the estimated revenue includes Rs. 3,884 billion from direct taxes, Rs. 3,607 billion from sales tax, Rs. 1,324 billion from customs duty, and Rs. 600 billion from federal excise duty. These projections reflect the government’s commitment to enhancing revenue generation while maintaining a balanced approach to taxation.
