ISLAMABAD, Dec 13: The government has to raise an additional revenue of Rs140 billion during the next three years to increase the current tax-GDP ratio from 11 per cent to 14.3 per cent as agreed with the International Monetary Fund under the Poverty Reduction and Growth Facility (PRGF).

The target would be achieved by plugging loopholes in the tax administration by restructuring and imposing new taxes, a senior official told Dawn here on Saturday.

Under the PRGF agreement, the government is bound to get the GDP ratio enhanced to 14.3 per cent by the end of fiscal 2003-04.

To meet the IMF conditionality, the tax officials have been asked by the government to work out those taxable items on which new taxes could be levied or on whom the ratio of taxes were low.

Similarly, more people would be brought into the tax net to meet the target.

According to the source, the government was left with no other option but to levy general sales tax (GST) on electricity, edible oils, vegetable ghee and pharmaceuticals “very shortly”.

The IMF had earlier recommended to Pakistan to impose 15 per cent GST on vegetable ghee, cooking oil, tractors and tubewells to increase its revenues but the conditionality was deferred due to US-led war on Afghanistan.

The source said that the government has asked the tax authorities to launch a campaign for detecting cases of tax evasion to increase the revenue.

The government would do away with all those maximum tax exemptions that were given to certain people in the past, the source said adding that the withdrawal of such exemptions would be announced in finance ordinance 2002-03.

“Besides, all the time-bound exemptions will expire after due date and no further extension will be given,” he said.