Pakistan may slap multiple taxes if quarterly revenue target missed

Pakistan government might implement contingency tax measures, if the average revenue collection over three months falls short of the projected target by 1%.

The additional taxes will be implemented in consultation with International Monetary Fund (IMF) staff.

According to a recent IMF report on Pakistan, the government might increase the advance income tax on the import of machinery by 1 percentage point, which is expected to generate PKR 2 billion per month.

Additionally, the advance income tax on the import of raw materials by industrial undertakings could also be increased by 1 percentage point, potentially raising PKR 3.5 billion per month.

The government may also raise the advance income tax on the import of raw materials by commercial importers by 1 percentage point, which could bring in PKR 1 billion per month.

An increase in the withholding tax on supplies by 1 percentage point is expected to collect PKR 1 billion per month, while a similar increase in the withholding tax on services could generate PKR 0.5 billion per month.

If the government increases the withholding tax on contracts by 1 percentage point, it could collect PKR 0.5 billion per month. Additionally, an increase in the Federal Excise Duty (FED) on aerated and sugary drinks by 5 percentage points is expected to generate PKR 2.3 billion per month.

For the month of August, the government had set a target of PKR 898 billion for the Federal Board of Revenue (FBR).

However, the FBR was only able to collect PKR 796 billion, despite taking advances from Karachi, Lahore, and Islamabad, missing the target by PKR 102 billion.