ISLAMABAD: Pakistan has devised an alternative plan to address its growing tax shortfall without resorting to a mini-budget, according to sources from the Federal Board of Revenue (FBR). The decision comes after Prime Minister Shehbaz Sharif rejected proposals to raise taxes on the salaried class.
FBR Chairman Rashid Langrial is leading efforts to implement this new strategy, with crucial negotiations set to take place today. The talks are expected to focus on several key measures to boost tax revenues, including the FBR’s Transformation Plan, the Track and Trace system, and the Retailers’ Scheme.
Under the Transformation Plan, FBR aims to modernize its framework to meet international standards. Additionally, the Retailers’ Scheme will facilitate the sharing of data on registered traders with the International Monetary Fund (IMF), enhancing transparency and compliance.
Despite these efforts, FBR sources revealed that from July to October, the board had been expected to collect PKR 17 billion from traders but fell short of the target. The Track and Trace system, which is set for installation across five sectors, will be reviewed for its extension to the tile sector as well. Proposed changes under this system include increasing the FBR fee on Point-of-Sale (POS) receipts by Rs1 and implementing special audits for retailers who fail to adopt POS systems.
The discussions with the IMF delegation, which is currently in Pakistan for loan talks, will include an evaluation of Pakistan’s tax strategy and the enforcement plan aimed at addressing the revenue shortfall. The IMF team is set to review the country’s economic performance and engage with relevant ministries to discuss potential solutions.
An IMF proposal may lead to a sharp fuel price hike from November 16, adding another layer of complexity to the ongoing negotiations. The outcome of these discussions will be crucial in determining Pakistan’s economic strategy moving forward.
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