ISLAMABAD: Facing a widening revenue gap, the federal government is weighing additional tax measures estimated at Rs200 billion for the second half of the fiscal year, after the Federal Board of Revenue (FBR) missed its collection targets in the first six months.
According to officials familiar with the matter, the plan — shared with the International Monetary Fund (IMF) during recent talks — includes proposals for higher taxes on non-filers, solar panel imports, and telecommunications services.
Although the FBR chairman has publicly ruled out an immediate mini-budget, insiders confirm that the IMF has been informed of a backup strategy involving potential tax hikes should the shortfall persist. These adjustments are reportedly tied to conditions for the release of the next installment under the $7 billion IMF bailout package.
Officials cautioned that if the government’s revenue performance remains below projections, “further fiscal tightening will be unavoidable.”
Proposed Tax Revisions
The proposed measures aim to bolster revenue collection through several key changes:
- Cash withdrawals by non-filers: The tax may be increased from 0.8% to 1.5%, bringing in an estimated Rs30 billion.
- Sales tax on solar panels: The rate could jump from 10% to 18%, likely increasing costs for consumers investing in renewable energy.
- Taxes on phone usage: The levy on mobile calls may rise from 15% to 17.5%, and on landline services from 10% to 12.5% — together expected to add about Rs44 billion (Rs24 billion from mobiles and Rs20 billion from landlines).
- Excise duty on consumer goods: A 16% Federal Excise Duty (FED) on items like biscuits, sweets, and chips could generate around Rs70 billion.
FBR’s Revenue Challenges
The FBR has already recorded a Rs198 billion shortfall in the first quarter of FY2024–25, collecting Rs2,885 billion against a target of Rs3,083 billion. For the first four months, the target exceeds Rs4,100 billion, while the total annual goal stands at Rs14,131 billion.
Sources warn that if corrective tax measures are not introduced soon, the government might have to slash development spending or revise down the yearly revenue target to stay within IMF program commitments
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