Islamabad, Sep 19 (IANS) The International Monetary Fund (IMF) has asked Pakistan to raise its tax collection target of Rs.1,250 billion ($16 billion) during the current fiscal, but no figure has been specified.

‘Due to depreciation of the rupee by 24 percent against the dollar and higher inflationary pressure in the range of 20 to 25 percent, (the IMF says) the tax collection target should be fixed on the higher side of earlier target of Rs.1,250 billion,’ The News Friday quoted official sources as saying.

According to Federal Board of Revenue (FBR) chairperson Ahmed Waqar, discussions were underway with the IMF, which had been asked to present its evaluation report, following which Pakistan would take a decision on raising the tax collection target.

‘We will take decision on jacking up the tax target by the end of the second quarter (October-December) of the fiscal year,’ he added.

‘Increased tax collection is a dire need for creating fiscal space to meet the requirements of the education and the health sectors,’ Waqar maintained.

According to the official, the tax target depended on GDP growth and if this projection was on the higher side, the revenue target could be revised upward.

The FBR has collected Rs.146 billion in the first two months (July-August) of the fiscal against a target of Rs.135 billion, an increase of Rs.11 billion despite political turmoil and other constraints.

The IMF mission here is currently engaging with Pakistani authorities for their perception of short-term macroeconomic framework, including projections of GDP, fiscal deficit, tax collection and expenditure, as well as projections related to external imbalance in the wake of growing current account deficits.

On GDP growth, the IMF has advised Pakistan to scale down its projection for the fiscal from 5.5 percent to 3.5-4 percent and scaling up the inflationary target to over 20 percent against 11 percent.

Bookmark with:

More from Pakistan