The administration of Shehbaz Sharif has started getting ready for the crucial talks with the next staff mission from the International Monetary Fund (IMF), hoping to finalize a plan this weekend.
There are seven potential tax increases in different industries if a mini-budget is presented.
The Federal Board of Revenue (FBR), however, intends to urge the government against hiking tax rates, according to The News, citing indications of economic recovery and a reduction in inflationary pressures.
Top official sources revealed to local media on Thursday that the government will strengthen its plan this weekend for discussions with the IMF Staff Mission, headed by Nathan Porter, who will visit Islamabad from November 11–15, 2024.
Pakistani authorities can choose between two choices. To achieve the agreed-upon fiscal deficit and primary balance objectives, they can release a small budget or cut spending.
The economic managers’ ability to persuade the government to cut spending rather than stifle the economy even more by revealing a tiny budget is now being put to the test.
The first four months of the current fiscal year have already seen a Rs189 billion revenue shortfall for the FBR. In the first half of the current fiscal year, this income gap is expected to increase to Rs321 billion.
According to the FBR, the government should try to persuade the IMF to lower the Rs12,913 billion revenue collection objective in light of the changes in nominal growth, the decline in LSM growth, and the decline in imports. The IMF might not, however, continue to support a lower FBR objective.
Pakistan has committed in writing to having a backup plan to increase tax collections in the event of a revenue shortage.
