12/08/2022
The federal government has started preparations for bringing a mini-budget worth more than Rs40 billion to ensure meeting the tax collection target and fulfilling the preconditions set by the IMF for the release of two IMF tranches worth $1.17 billion.
Sources in the Federal Board of Revenue (FBR) confirmed that the government was eyeing to impose taxes on fertiliser, sugar and textile sectors, adding that an amendment in the finance bill would be made through a presidential ordinance before the Executive Board meeting of the Washington-based lender.
The FBR’s Inland Revenue wing was preparing outlines and proposals for the mini-budget after the government had to reverse its decision of imposing fixed taxes on retailers which, the sources said, had resulted in losses worth Rs40 billion.
“The government plans to tax multiple sectors to collect Rs30 billion for the Pakistan State Oil (PSO),” the sources further said, adding that the move was part of the government’s efforts to save the PSO from bankruptcy.
In this regard, the Economic Coordination Committee of the Cabinet directed the Petroleum Division to work closely with the Oil and Gas Regulatory Authority to meet this additional financing.
“More taxes will be imposed on four major sectors through an amendment in the finance bill,” they said.
“The abolition of the tax has resulted in a loss of Rs40 billion in revenue,” the sources shared, adding that the tax had been deferred until October and from November, a new mechanism would be proposed to collect taxes from retailers.
