Pakistan prioritizes fiscal reforms, revenue strategies: IMF

News Image

By MG News | October 11, 2024 at 10:49 AM GMT+05:00

0:00

October 11, 2024 (MLN): Pakistani authorities agreed on fiscal adjustment and structural reforms, emphasizing revenue-enhancing strategies to support human capital growth amid rigid expenditures, according to the latest Staff Report published by the IMF. 

The authorities underscore the importance of implementing tax administration measures to reduce the compliance gap and expand the tax base, as well as the necessity of enforcement measures to support tax policy.

They agree on rationalizing the size of the PSDP, recognizing the need for an analysis to determine which current projects align with government priorities and which can be delayed or capped to reduce the throw-forward.

Additionally, they agreed on the need to improve PSDP project management to prevent the unsustainable growth of the throw-forward, and are continuing efforts to expand training coverage to all relevant federal agencies on the e-PADS.

The authorities stress the importance of close coordination with the provinces and continuing the expenditure devolution process to ensure better alignment of provincial revenues and expenditures, emphasizing the need for provinces to enhance their revenue collection efforts.

In its policy discussion section, the report underlined that the FY25 budget continues the gradual fiscal adjustment and targets an underlying primary surplus of  Rs1,177 billion, 1% of GDP.

The budget was approved by parliament on June 28, 2024, with the key policies, including, strengthening general government tax revenues to 12.3% of GDP will be achieved through measures worth over Rs1,723bn, or 1.4% of GDP.

Personal and corporate income tax (PIT and CIT) measures will generate Rs357bn by bringing exporters into the regular tax regime, streamlining PIT for salary (SI) and non-salary individuals (NSI), reducing slabs to five, and raising the maximum rate for NSI to 45%.

Exporters will be brought into the regular income tax regime.

Transforming the sales tax aims to generate Rs286bn by moving most exempt and zero-rated products to the standard rate.

Certain education, health and agricultural inputs products will be taxed at reduced rates of 5% and 10%.

Limited exemptions will be retained only for essential food and health items, as well as products acquired from charitable hospitals, textbooks, fuel, fertilizers and pesticides, as well as those in compliance with international and bilateral agreements.

The budget also ends the preferential Export Facilitation Scheme for locally purchased inputs.

In addition, the Federal Board of Revenue (FBR) will improve information sharing with provincial revenue authorities.

Provincial tax reforms will include the full alignment of their Agriculture Income Tax (AIT) regimes with the federal personal and corporate income taxes by October 2024 (end-October SB) with implementation from January 1, 2025, and collection in July 2025.

It will also include the transition of GST on services from a positive to a negative list, which will take effect from the start of FY26. 

Copyright Mettis Link News

 

Related News

Name Price/Vol %Chg/NChg
KSE100 131,949.07
198.95M
0.97%
1262.41
ALLSHR 82,069.26
730.83M
0.94%
764.01
KSE30 40,387.76
80.88M
1.11%
442.31
KMI30 191,376.82
77.76M
0.36%
678.77
KMIALLSHR 55,193.97
350.11M
0.22%
119.82
BKTi 35,828.25
28.42M
3.64%
1259.85
OGTi 28,446.34
6.84M
-1.02%
-293.01
Symbol Bid/Ask High/Low
Name Last High/Low Chg/%Chg
BITCOIN FUTURES 108,125.00 110,525.00
107,865.00
-2290.00
-2.07%
BRENT CRUDE 68.51 68.89
67.75
-0.29
-0.42%
RICHARDS BAY COAL MONTHLY 97.50 0.00
0.00
0.75
0.78%
ROTTERDAM COAL MONTHLY 106.00 106.00
105.85
-2.20
-2.03%
USD RBD PALM OLEIN 998.50 998.50
998.50
0.00
0.00%
CRUDE OIL - WTI 66.50 67.18
66.04
-0.50
-0.75%
SUGAR #11 WORLD 16.37 16.40
15.44
0.79
5.07%

Chart of the Day


Latest News
July 05, 2025 at 11:58 PM GMT+05:00

Weekly Market Roundup


July 05, 2025 at 02:57 PM GMT+05:00

National Savings Schemes see over Rs27bn inflow in May


July 04, 2025 at 10:16 PM GMT+05:00

CAT upholds CCP’s ruling against PREMA Milk


July 04, 2025 at 10:07 PM GMT+05:00

Gold price in Pakistan falls Rs1,500 per tola


July 04, 2025 at 08:01 PM GMT+05:00

TRG in Supreme Court



Top 5 things to watch in this week

Pakistan Stock Movers
Name Last Chg/%Chg
Name Last Chg/%Chg