Pakistan Govt Imposes PKR 215B in Additional Taxes Under IMF Conditions : Ishaq Dar


Dar stated that Pakistan's economic team has been in detailed negotiations with the IMF team to complete the pending review. As a result of these negotiations, the government plans to implement the additional taxes, but they have ensured that the burden of these taxes will not be borne by the vulnerable sections of society.

The government is also taking measures to reduce expenditure by PKR 85 billion, without cutting from the Public Sector Development Program (PSDP), salaries of government employees, and pensions.

The decision to increase tax revenue targets, allocate funds to provinces, and make specific changes to the Super Tax and tax on bonus shares was also discussed during the session. The government aims to increase tax revenue and improve the documentation of the economy through these measures.

Dar clarified that the recently introduced section 99D (Additional tax on certain income, profits, and gains) in the Income Tax Ordinance 2001 is not targeted at specific individuals or companies. It will be imposed on the entire sector that has experienced windfall gains, and the time period for this tax will be reduced from five years to three years.

In an effort to enhance the Alternate Dispute Resolution (ADRC), the government will form a three-member ADRC committee, and the judgment of ADRC will be binding on the Federal Board of Revenue (FBR) but not on the taxpayer.

The government is also increasing the budgeted allocation for the Benazir Income Support Programme (BISP) and introducing a petroleum development levy (PDL) on petrol and diesel.

Resuming the IMF program is crucial for Pakistan's cash-starved economy, as it faces a balance of payment crisis with limited currency reserves. The government is working to meet the IMF's conditions and attract funding from other multilateral and bilateral partners to address the economic challenges. Prime Minister Shehbaz Sharif has met with the Managing Director of the IMF, Kristalina Georgieva, to discuss the release of funds under the bailout.

Additionally, the government plans to reduce expenditure by PKR 85 billion. However, these cuts will not be made from the Public Sector Development Program (PSDP), government employee salaries, or pensions.

The government is also raising the tax revenue target for the Federal Board of Revenue (FBR) from PKR 9.2 trillion to PKR 9.415 trillion. Provinces will receive an increased fund allocation from PKR 5.276 trillion to PKR 5.399 trillion.

Regarding the Super Tax, which was introduced previously, the income slab has been raised to PKR 500 million for the implementation of the 10% tax. Different tax rates will apply based on different income brackets, with higher income groups facing higher rates.

The government also plans to impose a 0.6% tax on non-filers for cash withdrawals to improve the documentation of the economy and increase tax revenue.

Another tax measure discussed in the article is the imposition of a 10% tax on bonus shares, which will not be paid by companies but by those who receive the dividends.

The article mentions a provision known as section 99D, which is an additional tax on certain income, profits, and gains. The Finance Minister clarified that this measure is not targeted at specific individuals or companies but will be imposed on the entire sector that has experienced unexpected income, profits, or gains.

To enhance the AlternateDispute Resolution (ADRC), the government plans to form a three-member ADRCcommittee whose judgment will be binding on the Federal Board of Revenue (FBR)but not on the taxpayer.