Islamabad: The government may increase tax rates and removing expectations planned for the budget 2019-20, a news source reported. It may take this step in order to reach a staff-level agreement with the International Monetary Fund (IMF).
The government is considering options of increasing the general sales tax (GST), remove exemptions, and cut down expenditures when formulating the budget. It is also relying on the amnesty scheme to generate up to PKR 150 billion additional tax collection in order to close the huge gap of revenue for the current fiscal year.
According to sources, IMF stresses on value added tax (VAT), so it is expected that the authority will ask the government to at least devise a uniform collection mechanism of GST on goods and services. The aim of this step is to build a harmonized system.
Former finance minister and renowned economist Dr Hafiz Pasha has suggested against only cutting down development expenditures. He says this will only result in damaging the ongoing economic activities.
