In efforts to secure a new agreement with the International Monetary Fund (IMF), the government of Pakistan is all set to present federal budget for the fiscal year 2024-25 with an outlay of over Rs 18 trillion.
The budget would be presented before the National Assembly by Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb.
It is anticipated that Muhammad Aurangzeb-led finance team will set a tax collection target of Rs12.97 trillion. This target is set higher than the revised Rs9.252 trillion for the current fiscal year.
The Federal Board of Revenue (FBR) adjusted the current year’s target down from an initial Rs9.415 trillion. The FBR’s strategy to achieve a reduced fiscal deficit from 7.6% to 6.5% of GDP includes increasing revenue and decreasing expenditures.
Key revenue efforts will focus on Income Tax and Goods and Services Tax (GST), with expected increases of Rs1.7 trillion and Rs1.3 trillion, respectively. The breakdown of the tax collection target includes Rs5.512 trillion from direct taxes, Rs4.919 trillion from Sales Tax, Rs0.948 trillion from Federal Excise Duty, and Rs1.591 trillion from Customs Duty.
To expand its tax base, the IMF recommended Pakistan use detailed taxpayer data to improve tax compliance. This requires integrating data from various sources, including household and business surveys and social security information. Data sharing arrangements will prioritize privacy and confidentiality.
The FBR will utilize advanced technology to manage significant data exchanges, essential for effective tax collection. The government also plans to reduce spending on pensions, subsidies, and State-Owned Enterprises. The total budget expenditure is planned at over Rs18.5 trillion, focusing on balancing tax and non-tax revenues with controlled spending.
