Taxation

~~with focus on tax education~~

Flood surcharge imposition likely

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After holding technical level discussion, the government of Pakistan and IMF started the two-day policy level dialogue on Monday. The meeting discussed the issue of soaring fiscal deficit, as Pakistan seeks to keep it above five per cent against earlier target of 4.7 per cent of the GDP.

However, sources said that there was not consensus on this point in the meeting, which is likely to be settled in the second day (Tuesday) of meeting.

The sources said that Pakistan had asked the IMF to keep in view the ground realities before fixing economic targets, as the country is facing several challenges like war on terror and post-flood situation.

It might be recalled here that during the technical level discussion, Pakistan gave detailed presentations on power sector, performance and subsidy level, tax collected during the first eight months (July-February) of the current fiscal year and a target to be achieved by June 30, inflation level, subsidy given to power sector during the so far period of the financial year, and the fiscal deficit situation, to the IMF.

The government had assured the IMF’s team of taking revenue measures including imposition of 15 percent flood surcharge and 1.5 percent additional special excise duty (SED) and others. Meanwhile, it would broaden the tax base and recover the arrears, which would generate an additional amount. The proposed measures would give additional revenue of Rs 26 billion.

The government had informed the IMF that additional taxation measures would take the annual tax collection target to Rs 1630 billion from Rs 1604 billion. Similarly, the IMF was informed that fiscal deficit could increase if the government of Pakistan did not get funds for fighting against terrorism from the other countries. (Online)

posted @ 12:20 PM,

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