In order to meet the IMF preconditions for the release of two IMF tranches totaling $1.17 billion, the federal government has begun making preparations to introduce a mini-budget worth more than Rs40 billion.
An amendment to the finance bill would be made through a presidential ordinance prior to the Executive Board meeting of the Washington-based lender, according to Federal Board of Revenue (FBR) sources who confirmed that the government was considering taxing the fertiliser, sugar, and textile industries.
After the government was forced to change its mind about imposing fixed taxes on merchants, which the sources claimed had led to losses totaling Rs40 billion, the FBR’s Inland Revenue division began formulating outlines and ideas for the mini-budget.
“The government plans to tax multiple sectors to collect Rs30 billion for the Pakistan State Oil (PSO),” the sources further said, adding that the move was part of the government’s efforts to save the PSO from bankruptcy.
In order to fulfil this increased financing, the Economic Coordination Committee of the Cabinet instructed the Petroleum Division to collaborate closely with the Oil and Gas Regulatory Authority.
They stated that a modification to the financial law will result in the imposition of additional taxes on four important sectors.
The sources stated that the tax had been delayed until October and that starting in November, a new method would be proposed to collect taxes from shops. “The repeal of the tax has resulted in a loss of Rs40 billion in revenue,” the sources added.
The federal government removed the tax on electricity bills for a year on August 4 in response to pressure from traders on the fixed-tax system.