Pakistan has assured the International Monetary Fund (IMF) that it will introduce Rs. 200 billion in additional tax measures in January if revenue collection falls short or expenditure exceeds agreed limits during the first half of the fiscal year. The commitment is part of efforts to keep the country’s $7 billion IMF bailout programme on course.

According to The Express Tribune, the proposed contingency plan includes potential increases in income and withholding taxes on mobile and landline calls, as well as higher levies on cash withdrawals from banks. These steps will be activated only if the Federal Board of Revenue (FBR) fails to meet its end-December target or if fiscal discipline weakens.

Other possible measures include raising the sales tax on solar panels from 10% to 18% and expanding the federal excise duty (FED) to cover items such as confectioneries and biscuits. Authorities are also considering raising the standard sales tax rate to 19%, which could yield Rs. 225 billion annually, though the current focus remains on targeted adjustments.

Also Read: Punjab excise department proposes new number Plates for SUVs

The FBR faces mounting pressure after reporting a Rs. 198 billion shortfall in the first three months of FY2024-25, with Rs. 3.65 trillion collected by October 29. Proposed measures include doubling the withholding tax on cash withdrawals for non-filers to 1.5%, potentially adding Rs. 30 billion in revenue, and raising taxes on mobile calls and landlines to 17.5% and 12.5%, respectively.

Meanwhile, the provinces of Sindh and Punjab have deferred higher agriculture income tax rates for a year, shifting the burden back to existing taxpayers. Despite IMF resistance to lowering the 1.6% primary surplus target, both sides have agreed to review fiscal goals once flood loss estimates are finalized.