'No mini-budget is being introduced'

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have made ‘significant’ progress in their negotiations as no mini-budget would be introduced by the federal government, ARY News reported citing sources.

“Pakistan’s tax collection target of Rs 12.97 trillion will remain unchanged, and no mini-budget is expected,” the Federal Board of Revenue (FBR) sources said. They added that the IMF expressed satisfaction with tax reforms being taken by the Pakistani government.

According to sources, the FBR will not impose the general sales tax (GST) on petroleum products.

Meanwhile, the FBR sources said that Tax-to-GDP ratio has been improved from 8.8 percent to 10.3 percent while Rs 12 billion taxes are collected from retailers in three months. They added that 400,000 new traders have filed tax returns and the number of registered traders is increased from 200,000 to 600,000.

According to sources, the agricultural income tax collection will begin next year. The sources said that further discussions with IMF are anticipated, potentially leading to changes in the Tajir Dost Scheme.

Earlier, it was reported that Pakistan might introduce mini budget as the FBR was facing difficulties in meeting its tax collection targets.

According to sources, FBR needed to collect Rs2,654 billion in taxes for the first quarter of the fiscal year 2024-25, with Rs 1,190 billion was yet to be collected before September 2024

The government was reportedly considering several measures to boost tax collection, including stricter enforcement against defaulters and possible amendments to the Finance Bill.

It was reported that the tax authorities may be granted additional powers under the proposed mini-budget, potentially leading to more aggressive action against non-compliance.