The International Monetary Fund (IMF) has demanded for a reduction in tax slabs along with increasing tax on the salaried and non-salaried class. According to the details, the IMF has suggested to the Federal Board of Revenue (FBR) to double the tax burden for salaried and non-salaried class to eliminate their disparity, reducing the number of slabs from seven to four and tax exemption on private employers' contributions to pensioners should be abolished. IMF’s officials stated that if the suggestions on Personal Income Tax (PIT) are fully implemented then it could generate an additional 0.5 percent of GDP revenue which is equivalent to Rs500 billion on an annual basis. In the current financial year, FBR has so far collected Rs215 billion from the salaried class during the first eight months (July to February) of the current financial year. FBR can collect around Rs300 billion from the salaried class. However, this department can increase its revenue by eliminating exemptions and other preferential tax treatments.

Credit: Independent News Pakistan (INP)