ISLAMABAD (Web Desk) – The International Monetary Fund (IMF) has asked Pakistan to abolish all exemptions and concessions on sales tax as budget talks for the next fiscal year enter their final phase.
According to reports, negotiations between the IMF mission and the Federal Board of Revenue (FBR) are nearing completion, with detailed discussions on sales tax exemptions scheduled for today.
Three key meetings between IMF officials and FBR authorities are expected to take place, focusing on tax collection targets, new revenue measures, and the fiscal strategy for the upcoming financial year.
The IMF is insisting on a tax collection target of Rs15.264 trillion for the next fiscal year, while the FBR is attempting to negotiate a lower target.
Reports said the IMF has also demanded an additional Rs778 billion in revenue through enforcement measures. Meanwhile, new taxation measures worth Rs430 billion are under consideration for the upcoming budget. FBR officials are expected to give the IMF a detailed briefing on these proposals to finalise matters related to tax targets and revenue generation.
In addition, the FBR and IMF have reportedly agreed to keep the tax-to-GDP ratio target at 11.2 percent.
On the other hand, the IMF has proposed reducing the current sales tax rate from 22.8 percent to 18 percent, but has maintained its demand for the complete withdrawal of all tax exemptions.