Islamabad: The International Monetary Fund (IMF) has reduced its tax collection targets communicated to the Federal Board of Revenue (FBR) for FY2019-20, a new source, basing its information in a recent IMF staff circular, reported. As such, the tax collection target has been reduced to PKR 3.908 trillion from the previous figure of PKR 4.8 trillion.
The IMF staff report revealed that as a percentage of the GDP, the tax collection target for FY2019-20 projected a decline to 9.3% from its previous value of 10.9%. Other reduced projections are as follows:
Sales tax — down to PKR 1.427 trillion from PKR
1.852 trillion
Direct tax collection — down to PKR 1.6 trillion
from PKR 1.9 trillion
Federal excise duty — down to PKR 312 billion
from PKR 329 billion
Customs duty — down to PKR 546 billion from PKR
697 billion
For the next fiscal year, the IMF has projected a tax collection target of PKR 5.101 trillion. Before the COVID-19 pandemic, this target was PKR 6.138 trillion. On the other hand, the IMF has announced a fiscal stimulus package worth 1.2% of the GDP. This package includes:
Relief to vulnerable families by expanding existing
programmes and increased disbursements
Making the Utility Stores Corporation (USC)
network stronger and providing funds to improve food security
Temporary decrease in food prices to make
essential items affordable
Reducing oil prices
Payment of utility bills in instalments
Exemption of essential health machinery and
equipment from taxes to make healthcare affordable
Supporting daily wagers by setting up a PKR 200
billion fund
Increased funding to the National Disaster
Management Authority of Pakistan (NDMA)
Setting up a contingency fund
Eliminating the backlog of GST tax refunds for
export sector
Furthermore, the federal government has announced a special relief package for the construction industry in order to help it overcome the financial challenges posed by the ongoing COVID-19 crisis.
