ISLAMABAD: The Federal Board of Revenue (FBR) will impose a new surcharge on fossil fuels to generate additional revenue.
According to a report of the FBR, the additional 2.6 per cent increase required to reach the 13.7 per cent tax-to-GDP ratio by 2028-29 is expected to come from new surcharges on fossil fuels, enhancing the tax base of provincial taxes, and increasing non-tax revenue receipts of the federal government.
Under framework agreed between the government and the International Monetary Fund (IMF), the Government of Pakistan (GoP) has committed to achieving a tax-to-GDP ratio of 13.7 per cent by the fiscal year 2028-29, with 11.1 per cent expected to come from intensified policy and enforcement measures by the FBR.
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Supported by the World Bank, the FBR is implementing a Revenue Mobilization Program as part of this reform initiative.
The policies under the EFF are designed to enhance revenue collection from a broader range of sources, including at the provincial level.
Key measures agreed upon under the Medium-Term Fiscal Framework (MTFF) included eliminating preferential tax treatments; broadening the coverage of Personal and Corporate Income Tax (PIT and CIT) to include previously untaxed sectors and reducing tax slabs, thereby, raising the maximum tax rate to 45 per cent; simplifying PIT for salaried (SI) and non-salaried individuals (NSI); expanding the coverage and rates of the federal excise duty (FED) and overhauling the income tax and withholding tax regulations for motor vehicle registrations, the FBR report added.
Copyright Business Recorder, 2024
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