The government aims to impose Rs215 billion in additional taxes, said Finance Minister Ishaq Dar on Saturday, as the government eyes to resume the International Monetary Fund (IMF) Programme.
“In the last three days, Pakistan’s economic team has held detailed negotiations with the IMF team to complete the pending review,” Dar said in his address to wind up the Federal Budget 2023-24 debate in the National Assembly.
“As a result of these negotiations, the government is eyeing to impose additional taxes to the tune of Rs215 billion. These amendments will be tabled. However, we have ensured that the impact of these taxes would not be passed to the downtrodden,” he said.
“We have decided to reduce our expenditure by Rs85 billion. However, the reduction will not be from PSDP, salaries of government employees and pensions.”
“I have a belief that if the IMF programme is resumed then it’s all good, but if it doesn’t we will still suffice,” he said.
“We will place the agreement with IMF once finalized on the website of the finance ministry,” he added.
Dar noted that for the last few months, the entire nation is asking whether the IMF ninth review will be successfully completed or not.
“I want to assure the house that the government of Pakistan ensured compliance on all points of ‘Prior Action’ by April 2023. However, due to an external financing gap, our case could not have been presented to the IMF board.
He added that Prime Minister Shehbaz Sharif met Kristalina Georgieva, Managing Director of the IMF, twice on the sidelines of the Summit for a New Global Financial Pact, and it was decided that in order to extend the programme both sides i.e. government and the IMF team should conduct one last try.
Tax target raised
The government has decided to increase the Federal Board of Revenue (FBR) tax revenue target from Rs9.2 trillion to Rs9.415 trillion. The fund allocation for provinces has been increased from Rs5.276 trillion to Rs5.399 trillion.
“Moreover, the total expenditure of the federal government has been raised from Rs14.460 trillion to Rs14.480 trillion. Allocations for pension would increase from Rs761 billion to Rs801 billion,” he said.
The finance minister shared that allocations for subsidies and grants have been budgeted to Rs1.064 trillion and Rs1.405 trillion, respectively.
Dar reiterated that Pakistan will make all external payments on time.
