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IMF eases tax collection target of Pakistan

IMF eases tax collection target of Pakistan

ISLAMABAD: The International Monetary Fund (IMF) has shown agreement to relax tax collection target set up to Rs4,950 billion to Pakistan.

The International Monetary Fund (IMF) urged for setting the tax collection target up to Rs5,100 billion, whereas, the Federal Board of Revenue (FBR) predicted the collections up to Rs4,700 billion.

According to details, the FBR has entered into the final phase of finalising the recommendations for the taxes and exemptions for the new fiscal year after the approval of IMF to relax the collections.

Sources said that the authorities have decided to increase income tax and federal excise duty (FED) for non-filer the IMF placed a demand to end sales tax exemption on all sectors.

It is also recommended to further increase in GST rate for non-filer which stood at 17 per cent, whereas, the unregistered persons will not get the facility of the input tax credit.

Moreover, the authorities suggested charging FED on e-cigarette, imposition of 0.6 per cent to 1 per cent withholding tax on transactions through foreign currency and federal excise duty on beverages.

Sources added that it is also being considered to increase withholding tax up to 3 per cent on electricity bills and expansion of advance income tax to dealers, distributors and retailers.

The government is also expected to increase the tax on electricity bill worth up to Rs33,000 from 5 per cent to 7.5 per cent, 10 per cent on power utilisation bill worth from Rs33,000 to 66,000 and 15 per cent on bills worth more than Rs66,000, said sources.