Pakistan is likely to introduce mini budget as the Federal Board of Revenue (FBR) is facing difficulties in meeting its tax collection targets, source said on Thursday. FBR needs to collect Rs2,654 billion in taxes for the first quarter of the fiscal year 2024-25, with Rs 1,190 billion required in September 2024 alone. If FBR fails to meet the target by the end of the first quarter (July-September), the International Monetary Fund (IMF) may push Pakistan for a mini budget in order to seal $7bln loan deal, the sources said. The government is reportedly considering several measures to boost tax collection, including stricter enforcement against defaulters and possible amendments to the Finance Bill. There is also concern that individuals who fail to submit their income tax returns by September 30 could be classified as late filers for up to two years.

Late filers would face higher withholding taxes on income, vehicle token taxes, and property-related transactions. Sources further said, tax authorities may be granted additional powers under the proposed mini-budget, potentially leading to more aggressive action against non-compliance. Earlier, the International Monetary Fund (IMF) expressed ‘concerns’ over increasing circular debt in Pakistan’s power sector, sources privy to the development said. During the virtual talks with the IMF, Pakistan authorities shared the plan of additional 100 billion rupees increase int eh circular debt in the power sector during the current fiscal year.

Credit: Independent News Pakistan