The International Monetary Fund (IMF) has called for additional measures to be implemented in Pakistan in order to increase the tax net and achieve the revenue target of Rs 9,415 billion for the fiscal year 2023-2024.
One of the proposals put forward is to bring new sectors, such as construction and agriculture, into the tax net.
The inclusion of these sectors will help broaden the tax base and enhance tax collection from previously undertaxed areas.
This move will contribute to advancing a primary surplus of approximately 0.4 percent of GDP as part of the FY24 budget.
The increased revenue will also allow for the strengthening of support programs, particularly the Benazir Income Support Program (BISP), which aids the vulnerable segments of society.
The Pakistani authorities have expressed their commitment to continuing efforts to improve revenue administration. They are collaborating with international institutions such as the World Bank, the Asian Development Bank (ADB), and the IMF to enhance revenue collection and strengthen the tax system.
In the fiscal year 2023, work is underway to establish a Compliance Risk Management framework. This framework aims to enhance tax compliance in the following fiscal year, FY24.
The implementation of these measures and the expansion of the tax net are crucial steps for Pakistan to achieve its revenue targets, improve its fiscal position, and ensure sustainable economic growth.
The support and cooperation of international institutions are expected to play a significant role in facilitating these efforts.
