ISLAMABAD: International Monetary Fund (IMF) has suggested an increase of about 1.1 trillion rupees in the target of tax collection for the fiscal year 2022-23.
For the year 2022-23, the IMF has proposed Rs7.20 trillion tax target against 6.1 trillion rupees current target for 2021-22.
Thus, a massive increase in tax collection target in upcoming financial year will require imposition of additional taxes, withdrawal of agriculture tax exemptions and increase in tax burden on the salaried class.
Finance Minister Miftah Ismail visited the Federal Board of Revenue (FBR) headquarters and discussed the revenue collection position in the ongoing fiscal year and the possibility of fixing the next financial year’s target at around Rs7 trillion.
FBR Chairman Asim Ahmad briefed the minister that the collection may remain around Rs6 trillion in the current fiscal year, nearly Rs100 billion less than the target agreed with the IMF by the previous government, Tribune reported today.
The FBR chairman shared the mitigation measures with the finance minister, in case the collection fell further below expectation due to import compression and he assured the minister of meeting the shortfall through various administrative measures like ensuring collection in the disputed tax matters.
The government is also scheduled to begin face-to-face talks with the IMF next week, subject to its ability to withdraw fuel subsidies from the middle of current month.
The rationalisation of tax slabs will almost double the tax burden on the middle and upper middle-income groups, although the finance minister has already said that the tax burden on the salaried individuals will not be increased.