Policy talks between Pakistan and the International Monetary Fund (IMF) have been ongoing since Monday.
Pakistan and IMF Agreed To Not Put New Taxes
So far, both parties have agreed to retain the yearly tax collection target of Rs. 9,415 billion, in addition to other revenue-boosting measures.
In addition, the lender has contacted major bilateral partners to confirm its support for Pakistan in the form of additional rollovers and external inflows in the coming months.
No Mini-Budget
According to FBR sources, there will be no mini-budget this fiscal year, and Caretaker Finance Minister Dr. Shamshad Akhtar has informed the IMF that no new levies will be imposed.
Instead, the emphasis will be on meeting the ambitious annual tax target, with authorities certain that the ‘target will be met easily.’
According to FBR authorities, all targets for the first four months of FY 24 have been met.
The IMF has been given a comprehensive plan outlining administrative methods to accomplish the massive Rs. 9,415 billion tax objective.
IMF Expressed Confidence in Pakistan’s Ability
Furthermore, the IMF has expressed confidence in Pakistan’s ability to meet the defined tax goal, and steps to combat tax evasion in the real estate industry will be implemented.
According to sources, eliminating tax fraud in real estate is critical for the general health of the economy, and the FBR is determined to undertake required reforms.
Furthermore, the tax regulator promised to strengthen administrative measures to increase tax revenue.
Moreover, the overarching goal is to broaden the tax net by documenting economic activities, which is consistent with ongoing efforts to increase transparency.
Tax Revenue Target of FY24
However, caretaker Finance Minister Dr. Shamshad Akhtar emphasized the government’s commitment to maintaining the Rs. 9,415 billion tax target without imposing additional tax burdens on the public in an informal conversation with the media.
Meanwhile, she announced a policy of fiscal austerity in the government, assuring the IMF that budget deficits would be kept under control through prudent fiscal management.
According to the finance minister, the crisis lender has expressed complete confidence in the caretaker government.
Benazir Income Support Program
Furthermore, she went on to say that the IMF was particularly pleased with the Benazir Income Support Program and development spending initiatives.
Moreover, With the approval of the IMF’s Executive Board, the $710 million second tranche of the $3 billion Standby Arrangement (SBA) is expected to be disbursed in the first half of December.
To read our blog on “IMF wants to tax retail, agriculture and real estate sectors,” click here.