In the forthcoming budget 2022-23, the government is considering implementing a specific levy or increasing the tax burden on paid and non-salaried classes earning more than Rs. 20 million per year.
Shehbaz Sharif, the Prime Minister of Pakistan, presided over a high-level meeting to examine the key components of the next budget.
The premier will have to choose between increasing tax collection and then increasing subsidies, or lowering the tax collection objective and then reducing subsidies allocation.
Instead of increasing the percentage of indirect taxes, the government is considering increasing the tax burden on a wealthy and affluent segment of society. “Yes, we are considering raising the tax rate on the rich,” acknowledged top government officials.
One of the proposals is to impose a tax on the model of the super tax, which was originally levied at a rate of 5% on income earners of Rs. 50 million per year but was later decreased and then eliminated.
Prime Minister Shehbaz Sharif will make all such decisions after his return from Turkey.
For the upcoming fiscal year 2022-23, Prime Minister Shehbaz Sharif will have to make a policy decision on whether to increase the allocation of subsidies while increasing the FBR’s tax collection target or reduce the allocation of subsidies while decreasing the FBR’s tax collection target.
To comply with the IMF’s proposed fiscal framework, the government must choose between these two scenarios.
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