The federal government of Pakistan has agreed with the International Monetary Fund (IMF) to implement seven new taxation measures during the 2024-25 fiscal year if revenue collection falls short of the projected target by 1 percent. This agreement was revealed in the IMF’s report titled “Extended Arrangement under the Extended Fund Facility (EFF).”
According to the report, if the rolling average of revenue collection over a three-month period is below the target by 1 percent, the government, in consultation with IMF staff, will assess the adoption of one or more of the following contingency measures:
- Increase advance income tax on the import of machinery by 1 percentage point, expected to generate Rs. 2 billion per month.
- Increase advance income tax on the import of raw materials by industrial undertakings by 1 percentage point, with an expected collection of Rs. 3.5 billion per month.
- Increase advance income tax on the import of raw materials by commercial importers by 1 percentage point, projected to raise Rs. 1 billion per month.
- Increase withholding tax on supplies by 1 percentage point, expected to collect Rs. 1 billion per month.
- Increase withholding tax on services by 1 percentage point, with an expected collection of Rs. 0.5 billion per month.
- Increase withholding tax on contracts by 1 percentage point, projected to raise Rs. 0.5 billion per month.
- Increase Federal Excise Duty (FED) on aerated and sugary drinks by 5 percentage points, expected to generate Rs. 2.3 billion per month.
