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IMF asks Pakistan to raise income and sales tax 

10:23 AM | 8 Oct, 2021
IMF asks Pakistan to raise income and sales tax 

ISLAMABAD – The International Monetary Fund (IMF) on Thursday asked Pakistan to take additional taxation measures in the shape of income and sales taxes and regulatory duty (RD) to pull up the annual tax collection target from Rs5.8 trillion to Rs6.3 trillion.

This new demand by the IMF comes during the ongoing virtual talks in the context of losses incurring on the account of non-collection of petroleum levy of over Rs600 billion during the current fiscal year.

The government will have to take additional revenue measures on the FBR front to bridge the gap that surfaced on account of non-collection of petroleum levy.

Another recommendation by the IMF is to increase the base price of the electricity tariff to the tune of Rs1.40 per unit to curtail the surge in circular debt.

Pakistani authorities have made quarterly adjustments to the power tariff, but if the base price is not increased, it is feared that the pace of accumulation envisaged under the Circular Debt Management Plan (CDMP) won’t be materialised.

“Talks are underway and both sides may evolve a consensus on a staff-level agreement whereby the FBR’s target may be jacked up from Rs5.8 trillion to Rs6-6.1 trillion for the current fiscal year in the wake of FBR’s increased collection at import stage,” an official told the media.

IMF has also made a suggestion to increase the rate of personal income tax by adjusting the higher income bracket earning Rs75 million on an annual basis, the officials said. There are different proposals under consideration to adjust the rate of personal income tax to fetch an additional Rs100 billion to Rs150 billion.

There is another proposal to withdraw more GST exemptions within the current fiscal year. The FBR has also prepared a list of a few dozen items where the RD will be jacked up for getting additional revenues. The withdrawal of Additional Customs Duty recommended by the National Tariff Commission might be delayed but the final decision was expected on the eve of the upcoming budget.

So far, the IMF is satisfied with the collection of the board, says FBR Chairperson Dr Mohammad Ashfaque.

He was speaking to journalists after attending the Senate Standing Committee on Finance at the Parliament House.

He said that the ongoing talks with the IMF have not concluded so far, but that the Fund staff was satisfied with the collection of the board. He said that the FBR exceeded its target by Rs186 billion in the first quarter as the revenue collection stood at Rs1,395 billion in the first three months of the current fiscal year.

Daily Pakistan Global Web Desk

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Currency Rates in Pakistan Today - Pakistani rupee to US Dollar, Euro, Pound, Dirham, and Riyal - 17 April 2024

Pakistani currency saw minor adjustment against global currencies on April 17, 2024. US dollar was being quoted at 277.4 for buying and 280.4 for selling.

Euro comes down to 293.15 for buying and 296.1 for selling while British Pound stands at 344.25 for buying, and 347.6 for selling.

UAE Dirham AED was at 75.4 and Saudi Riyal's new rates was at 73.30. 

Today’s currency exchange rates in Pakistan - 17 April 2024

Currency Symbol Buying Selling
US Dollar USD 277.4 280.4
Euro EUR 293.15 296.1
UK Pound Sterling GBP 344.25 347.6
U.A.E Dirham AED 75.45 76.2
Saudi Riyal SAR 73.3 74.05
Australian Dollar AUD 181 182.5
Bahrain Dinar BHD 739.38 747.38
Canadian Dollar CAD 201 203
China Yuan CNY 38.45 38.85
Danish Krone DKK 40.45 40.85
Hong Kong Dollar HKD 35.57 35.92
Indian Rupee INR 3.33 3.44
Japanese Yen JPY 1.86 1.94
Kuwaiti Dinar KWD 902.26 911.26
Malaysian Ringgit MYR 58.24 58.84
New Zealand Dollar NZD 164.75 166.75
Norwegians Krone NOK 25.38 25.68
Omani Riyal OMR 722.1 730.1
Qatari Riyal QAR 76.37 77.07
Singapore Dollar SGD 204.5 206.5
Swedish Korona SEK 25.72 26.02
Swiss Franc CHF 307.11 309.61
Thai Bhat THB 7.61 7.76

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