ISLAMABAD: The IMF team was briefed via video-link in Washington DC on Thursday about the forthcoming mini-budget and the limited withdrawal of tax incentives, enactment of additional regulatory duties on luxury duties to be presented next week.
Also, the mini-budget could see the slashing of Public Sector Development Programme 2018-19 by Rs330-440 billion, reports The News.
The IMF was apprised by the Pakistani authorities that the government was considering taking additional taxation measures of Rs100 to Rs125 billion via proposed changes in the Finance Act 2018 and enactment of additional customs duty and raising regulatory duty on import of luxury items.
And there are chances some income tax exemptions could be taken back, although no final decision has been taken in this regard.
The Federal Board of Revenue’s tax collection target could be decreased to Rs4,300 billion-Rs4,325 billion from Rs4,435 billion for FY19 set by the previous government.
The tax regulator has successfully persuaded the Finance ministry that the project targeted of Rs4,435 billion was based on a forecast of last years collection at Rs3,935 billion, however, the actual collection was recorded at Rs3,842 billion.
It contended that without taking any additional taxation measures it would be able to collect a maximum of Rs4,200 billion.
In a video conference held with the IMF team at 6:30 pm on Thursday at the Finance Ministry, the Minister for Finance Asad Umar, Minister for State for Revenues Hammad Azhar and other informed them the budget to be presented would be based on realities.
The Pakistani authorities told the IMF team that overall revenue collection targets and expenditure adjustments would be carried out to rein in the budget deficit to sustainable levels.
And the IMF team is set to visit Islamabad from September 27th for one week to hold talks.
The newly installed govt is mulling to pull back tax incentives by raising taxable ceiling from Rs0.4 million to Rs1.2 million and decreasing the maximum tax rate from 30 percent to 15 percent introduced by the previous PML-N government via Finance Act 2018.
Also, the government intends to take back partial incentives via changes in the Finance Act and will present the revised bill in the National Assembly on coming Tuesday.
And the IMF team was told various measures are being contemplated to decrease the development outlay from Rs1,030 billion to Rs600 to Rs700 billion contingent on the availability of resource kitty.
Increasing additional customs duty from 2 to 3 percent and raising regulatory duty on luxury imported items like mobiles, food items, cosmetics, jewellery and cars is being considered too.
