ISLAMABAD, June 5: The International Monetary Fund (IMF) has proposed to the tax authorities to fix revenue collection target for the year 2003-04 at around Rs550 billion an increase of 19 per cent over the revenue projection of 2002-03.

Well-placed sources told Dawn on Thursday that IMF believed that besides 9 per cent normal growth in tax collection each year, the withdrawal of income tax exemptions as well as levy of duty and taxes on other small items during the budget would also result into generation of revenue in the next fiscal year.

The sources said that the tax authorities have formally conveyed to the finance ministry that the proposed target of the Fund was over-ambitious and could not be achieved easily.

They proposed to the government to initially fixed the revenue collection target at Rs510 billion for the fiscal year 2003-04 an increase of 11.13 per cent over the expected collection of Rs458.9 billion in the current financial year.

The sources said during the Fund’s officials visit to Pakistan in July next, the tax authorities would finalize the revenue target following the realization of current fiscal revenue target.

The sources said the current fiscal revenue would be the yardstick to finalize the next fiscal revenue target, said the sources.

The target would be finalized following the calculation of new taxation measures and reduction in duty and taxes in the budget.

According to a break-up, the tax authorities have projected Rs224 billion revenue from sales tax during 2003-04 against the current year projection of Rs205.7 billion, an increase of Rs18.3 billion.