ISLAMABAD, May 24: The government may introduce more than Rs279bn revenue measures in the 2013-14 budget to fulfil the conditions attached with the IMF’s proposed Extended Fund Programme for Pakistan.
In order to qualify for the programme, Federal Board of Revenue has proposed a revenue target of Rs2676bn for the year 2013-14, up by 30.53pc or Rs626bn from the revised target of Rs2050bn for the current fiscal year.
A well-placed source in the FBR told Dawn that the revenue target is expected to be finalised by the PML (N) government in the next couple of weeks.
The IMF has given clear indications to Pakistani economic wizards viz-a-viz finalisation of the budget proposals in case Islamabad wants to opt for the bailout package.
The additional revenue over and above the current fiscal target of Rs2050 billion would have to be met through 80pc revenue measures and 20pc administrative measures.
As per IMF formula, the government would have to introduce new revenue measures of Rs279.4bn, while only Rs69.85 billion would be collected through administrative measures, like plugging of loopholes in the taxation system.
The finance ministry has projected growth in rate of inflation at 9pc in 2013-14 and expects that the economy may grow by 4pc.
Because of the factors of inflation and economic growth, the revenue of Rs276.75bn would will be raised in 2013-14 without the involving tax officials efforts.
The PML (N) government would have to take some unpopular decisions, like introduction of new taxes, to generate revenue.
“We have already given a presentation to the finance minister designate Ishaq Dar, and he has directed the FBR to work out revenue measures for the next budget, said a source.
“Another presentation is expected to be given in the next few days over revenue measures,” the source added.To control the budget deficit, the caretaker government has already worked out more than Rs152bn revenue measures. These measures were earlier expected to be imposed through presidential ordinance, but the ordinance may not be signed by the president.
Presidential spokesperson Farkhatullah Babar told Dawn that the President has not signed any ordinance that seeks to impose new taxes.
“A new taxation proposal is a serious business that must be legitimately left to the new elected government that would be in place in a few days,” Mr Babar said.
The source said that the measures which were part of the draft ordinance would now be made part of the finance bill. Several other revenue measures would be announced in the budget, the source added.
The revenue measures include upward revision of sales tax rate, introduction of a string of new withholding taxes, upward revision in rate of existing withholding taxes, withdrawing customs exemptions and minimising customs concessions.
The exemptions available to special sectors, through statuary regulatory orders, would be withdrawn to plug loopholes in the existing tax machinery.