ISLAMABAD: In a bid to clinch the fresh IMF agreement, the government of Pakistan is all set to unveil the upcoming budget for 2024-25 by putting the FBR’s tax collection target at Rs12.97 trillion for the next financial year against the revised estimates of Rs9.252 trillion for the outgoing fiscal year.
The Federal Bureau of Revenue had revised downwards the tax collection target of Rs9.2 trillion against the initial target of Rs9.415 trillion passed by the parliament on the eve of the last budget for 2023-24. It wants to pursue financial consolidation by bringing down the overall fiscal deficit from more than 7.6 percent, of the outgoing financial year, to 6.5 percent of GDP in the next budget through revenue efforts and limiting unbridled expenditures.
The highest tax revenue mobilization efforts will be made on Inland Revenue front including Income Tax and GST to fetch increased revenues of Rs1.7 trillion and Rs1.3 trillion respectively through nominal growth, effective enforcement and massive taxation steps. Out of Rs12.97 trillion annual tax collection target for the upcoming budget, the Federal Bureau of Revenue foresees tax collection of Rs5.512 trillion through direct taxes, including Rs5.45 trillion in shape of Income Tax, Sales Tax of Rs4.919 trillion, Federal Excise Duty of Rs 0.948 trillion and Customs Duty of Rs1.591 trillion.
On increasing the narrowed tax base, the IMF also suggests access to detailed data on taxpayers, including their socio-economic characteristics and taxes they owe and pay.
The government of Pakistan will also undertake a cut in expenditures on pension reforms front, subsidies and doling out the cost State Owned Enterprises. With total expenditure of over Rs18.5 trillion for the next budget, the government will have to mobilize both tax and non-tax revenues as well as expenditures side.
