KARACHI – In an effort to address potential shortfalls in the annual tax target, the caretaker government has formulated a contingency plan that involves implementing strategic tax measures, effectively constituting a mini-budget. The government anticipates generating over Rs 18 billion per month through these measures.
According to the media reports, the contingency plan outlines several measures, including imposing an additional tax of Rs 5 per kg on sugar, elevating the GST rate on textile and leather products to 18 percent, and further raising taxes on the import of machinery and raw materials. Additionally, considerations involve enhancing taxes on the import of machinery, raw materials, supplies, services, and contracts.
Furthermore, the government intends to raise its tax and petroleum development levy target for the upcoming financial year. The proposed target is Rs 11,000 billion, a substantial increase from the current target of Rs 1590 billion.
Additionally, the Petroleum Development Levy annual target is set to rise from Rs 918 billion to Rs 1065 billion, resulting in an additional levy of Rs 49 billion this year and Rs 147 billion next year.
This plan has been communicated to the International Monetary Fund (IMF) as part of the caretaker government’s endeavors to secure a bailout package. Given the IMF’s prior concerns about Pakistan’s fiscal deficit, the government is optimistic that these proposed tax hikes will contribute to narrowing the deficit.
